The Wall Street Journal reported the following spot and forward rates for the Swiss franc ($ per SF). Spot 30-day forward 90-day forward 180-day forward $ 0.8226 $ 0.8552 $ 0.8564 $ 0.8611 a. Was the Swiss franc selling at a discount or premium in the forward market? Discount Premium b. What was the 30-day forward premium (or discount) percentage? Note: Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. 30-day forward premium/discount % c. What was the 90-day forward premium (or discount) percentage? Note: Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. 90-day forward premium/discount % d. Suppose you executed a 90-day forward contract to exchange 340,000 Swiss francs into U.S. dollars. How many dollars would you get 90 days hence? Dollars for Swiss francs e. Assume a Swiss bank entered into a 180-day forward contract with Bankers Trust to buy $340,000. How many francs will the Swiss bank deliver in six months to get the U.S. dollars? Note: Round your answer to 2 decimal places.

International Financial Management
14th Edition
ISBN:9780357130698
Author:Madura
Publisher:Madura
Chapter7: International Arbitrage And Interest Rate Parity
Section: Chapter Questions
Problem 27QA
Question
help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working
The Wall Street Journal reported the following spot and forward rates for the Swiss franc ($ per SF).
Spot
30-day forward
90-day forward
180-day forward
$ 0.8226
$ 0.8552
$ 0.8564
$ 0.8611
a. Was the Swiss franc selling at a discount or premium in the forward market?
Discount
Premium
b. What was the 30-day forward premium (or discount) percentage?
Note: Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.
30-day forward premium/discount
%
c. What was the 90-day forward premium (or discount) percentage?
Note: Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.
90-day forward premium/discount
%
d. Suppose you executed a 90-day forward contract to exchange 340,000 Swiss francs into U.S. dollars. How many dollars would you
get 90 days hence?
Dollars for Swiss francs
e. Assume a Swiss bank entered into a 180-day forward contract with Bankers Trust to buy $340,000. How many francs will the Swiss
bank deliver in six months to get the U.S. dollars?
Note: Round your answer to 2 decimal places.
Transcribed Image Text:The Wall Street Journal reported the following spot and forward rates for the Swiss franc ($ per SF). Spot 30-day forward 90-day forward 180-day forward $ 0.8226 $ 0.8552 $ 0.8564 $ 0.8611 a. Was the Swiss franc selling at a discount or premium in the forward market? Discount Premium b. What was the 30-day forward premium (or discount) percentage? Note: Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. 30-day forward premium/discount % c. What was the 90-day forward premium (or discount) percentage? Note: Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. 90-day forward premium/discount % d. Suppose you executed a 90-day forward contract to exchange 340,000 Swiss francs into U.S. dollars. How many dollars would you get 90 days hence? Dollars for Swiss francs e. Assume a Swiss bank entered into a 180-day forward contract with Bankers Trust to buy $340,000. How many francs will the Swiss bank deliver in six months to get the U.S. dollars? Note: Round your answer to 2 decimal places.
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