Table 2 gives the exchange rate quotations for the U.S. dollar and the British pound. Table 2. Foreign Exchange Quotations Britain (Pound) 30-day Forward 60-day Forward 180-day Forward U.S. Dollar Equivalent Tuesday 1.3448 1.3392 1.3278 1.3128 Monday 1.3561 1.3507 1.3401 1.3260 Currency Per U.S. Dollar Tuesday Monday 0.7436 0.7374 0.7467 0.7404 0.7531 0.7462 0.7617 0.7541 (a) If you were to buy pounds for immediate delivery, what is the dollar cost of each pound on Tuesday? (b) If you were to sell dollars for immediate delivery, what is the pound cost of each dollar on Tuesday? (c) Regarding the Tuesday quotations: compared to the cost of buying 100 pounds on the spot market, if 100 pounds were bought for future delivery in 180 days the dollar cost of the pounds would be how much higher or lower (if lower, enter as a negative number)?
Table 2 gives the exchange rate quotations for the U.S. dollar and the British pound. Table 2. Foreign Exchange Quotations Britain (Pound) 30-day Forward 60-day Forward 180-day Forward U.S. Dollar Equivalent Tuesday 1.3448 1.3392 1.3278 1.3128 Monday 1.3561 1.3507 1.3401 1.3260 Currency Per U.S. Dollar Tuesday Monday 0.7436 0.7374 0.7467 0.7404 0.7531 0.7462 0.7617 0.7541 (a) If you were to buy pounds for immediate delivery, what is the dollar cost of each pound on Tuesday? (b) If you were to sell dollars for immediate delivery, what is the pound cost of each dollar on Tuesday? (c) Regarding the Tuesday quotations: compared to the cost of buying 100 pounds on the spot market, if 100 pounds were bought for future delivery in 180 days the dollar cost of the pounds would be how much higher or lower (if lower, enter as a negative number)?
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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Table 2 gives the exchange rate quotations for the U.S. dollar and the British pound.
Table 2. Foreign Exchange Quotations
Britain (Pound) 30-day Forward 60-day Forward 180-day Forward
U.S. Dollar Equivalent
Tuesday
1.3448 1.3392 1.3278 1.3128
Monday
1.3561 1.3507 1.3401 1.3260
Currency Per U.S. Dollar
Tuesday Monday
0.7436 0.7374 0.7467 0.7404 0.7531 0.7462 0.7617 0.7541
-
(a) If you were to buy pounds for immediate delivery, what is the dollar cost of each pound on Tuesday?
-
(b) If you were to sell dollars for immediate delivery, what is the pound cost of each dollar on Tuesday?
-
(c) Regarding the Tuesday quotations: compared to the cost of buying 100 pounds on the spot market, if 100 pounds were bought for future delivery in 180 days the dollar cost of the pounds would be how much higher or lower (if lower, enter as a negative number)?
Transcribed Image Text:Table 2. Forelgn Exchange Quotations
U.S. Dollar
Equivalent
Currency Pcr
U.S. Dollar
Tuesday
Monday
Tuesday
Monday
Britain (Pound)
30-day Forward
60-day Forward
180-day Forward
1.3448
1.3392
1.3278
1.3561
0,7436
0.7467
0.7531
0.7617
0.7374
1.3507
0.7404
0.7462
0.7541
1.3128
1.3260
(a) If you were to buy pounds for immediate delivery, what is the dollar cost of each
pound on Tuesday?
(b) If you were to sell dollars for immediate delivery, what is the pound cost of each
dollar on Tuesday?
(c) Regarding the Tuesday quotations: compared to the cost of buying 100 pounds
on the spot market, if 100 pounds were bought for future delivery in 180 days
the dollar cost of the pounds would be how much higher or lower (if lower, enter
as a negative number)?
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