(b) You are a foreign exchange trader in an investment bank. Your foreign exchange dealer has quoted the following exchange rates: USD1 = SGD 1.3328 / 38 USD1 = MYR 4.1010/ 24 (i) Given the recent changes in government policy, you foresee an appreciation in value of SGD against MYR and have decided to purchase SGD 200,000 using the above exchange rate. Calculate the amount of MYR required for this transaction. (ii) Assume you have purchased USD 70,000 at the above USD/MYR exchange rate. You plan to hold the USD overnight and would like to limit the losses to a maximum of MYR 8,000. Calculate the stop loss rate for the USD position.

(b) You are a foreign exchange trader in an investment bank. Your foreign exchange dealer has quoted the following exchange rates: USD1 = SGD 1.3328 / 38 USD1 = MYR 4.1010/ 24 (i) Given the recent changes in government policy, you foresee an appreciation in value of SGD against MYR and have decided to purchase SGD 200,000 using the above exchange rate. Calculate the amount of MYR required for this transaction. (ii) Assume you have purchased USD 70,000 at the above USD/MYR exchange rate. You plan to hold the USD overnight and would like to limit the losses to a maximum of MYR 8,000. Calculate the stop loss rate for the USD position.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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