Spot and forward rates (LO21-2) 1. The Wall Street Journal reported the following spot and forward rates for the Swiss franc ($/SF): a. b. C. d. e. Spot 30-day forward 90-day forward 180-day forward $0.8202 $0.8244 $0.8295 $0.8343 Was the Swiss franc selling at a discount or premium in the forward market? What was the 30-day forward premium (or discount)? What was the go-day forward premium (or discount)? Suppose you executed a 90-day forward contract to exchange 100,000 Swiss francs into U.S. dollars. How many dollars would you get 90 days hence? Assume a Swiss bank entered into a 180-day forward contract with Bankers Trust to buy $100,000. How many francs will the Swiss bank deliver in six months to get the U.S. dollars?
Spot and forward rates (LO21-2) 1. The Wall Street Journal reported the following spot and forward rates for the Swiss franc ($/SF): a. b. C. d. e. Spot 30-day forward 90-day forward 180-day forward $0.8202 $0.8244 $0.8295 $0.8343 Was the Swiss franc selling at a discount or premium in the forward market? What was the 30-day forward premium (or discount)? What was the go-day forward premium (or discount)? Suppose you executed a 90-day forward contract to exchange 100,000 Swiss francs into U.S. dollars. How many dollars would you get 90 days hence? Assume a Swiss bank entered into a 180-day forward contract with Bankers Trust to buy $100,000. How many francs will the Swiss bank deliver in six months to get the U.S. dollars?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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The Wall Street Journal reported the following spot and forward rates for the Swiss franc ($/SF):
Spot $0.8202
30-day forward $0.8244
90-day forward $0.8295
180-day forward $0.8343
Was the Swiss franc selling at a discount or premium in the forward market?
What was the 30-day forward premium (or discount)?
What was the 90-day forward premium (or discount)?
Suppose you executed a 90-day forward contract to exchange 100,000 Swiss francs into U.S. dollars. How many dollars would you get 90 days hence?
Assume a Swiss bank entered into a 180-day forward contract with Bankers Trust to buy $100,000. How many francs will the Swiss bank deliver in six months to get the U.S. dollars?
Transcribed Image Text:Spot and forward rates (LO21-2)
1. The Wall Street Journal reported the following spot and forward rates for the Swiss franc ($/SF):
a.
b.
C.
d.
e.
Spot
30-day forward
90-day forward
180-day forward
$0.8202
$0.8244
$0.8295
$0.8343
Was the Swiss franc selling at a discount or premium in the forward market?
What was the 30-day forward premium (or discount)?
What was the go-day forward premium (or discount)?
Suppose you executed a 90-day forward contract to exchange 100,000 Swiss francs into U.S. dollars.
How many dollars would you get 90 days hence?
Assume a Swiss bank entered into a 180-day forward contract with Bankers Trust to buy $100,000. How
many francs will the Swiss bank deliver in six months to get the U.S. dollars?
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