Today's spot rate for the Indonesian rupiah (IDR) is USD/IDR 2,400.00, and the New Zealand dollar trades at USD/NZD 1.6000. The IDR/NZD cross rate is: A. 0.00067. B. 1,492.53. C. 3,840.00.

Q: Use the information below to answer the following questions. U.K. Pound 6-months forward (£) Japan…

A: Risk-free rate refers to the rate at which the company is earning the returns without taking any…

Q: Let the U.S. dollar-yen spot rate be ¥120/$. Also, let the 180-day forward exchange rate be…

A: Calculation- Forward discount = [[forward exchange rate - spot exchange rate)/ spot exchange…

Q: sume that the spot rate for the US Dollar is ZMW24, while the 180-day forward rate for the Zambian…

A: When forward rates are more than spot rate, then one say that there exists a premium for forward…

Q: Calculate the cross rate between the EUR (the euro) and the INR (Indian rupee). Set it up as…

A: For Computing Cross Rate we first denote the Currency rate as follows A = INR B = USD C = EUR For…

Q: If the spot rate is NZ$0.50/S and the forward rate is NZS0.55/S. The spot exchange rate and the…

A: Spot rate: It is the quoted price on any asset, or a security for instant settlement.

Q: The spot rate for the British pound is £.7199 = $1 and the Canadian dollar is Can$1.1022 = $1. What…

A: £/$ = 0.7199 Can$/$ = 1.1022   Cross rate £/Can$ = ?

Q: Consider the following table, which reports the spot exchange rate between the dollar and the pound,…

A: Spot exchange rate ($/£)1.1122r US %r UK %1 month2.10%2.10%3 month2.90%2.50%6 month4%2.90%1…

Q: Is there any violation of CIP? (b) Calculate the covered margin (going short on the AUD). (c)…

A: Here the spot rate is lower than the forward rate, so the EUR is selling at a premium.  The interest…

Q: he following are the spot and the swap forward rates of the AUD/USD  Spot…

A: A spot rate, or spot cost, addresses a contracted cost for the buy or offer of an item, security, or…

Q: Calculate the possible rate for buying GBP

A: Triangular arbitrage is the process where two related goods set the third price. The FX cross…

Q: Q4) Assume the current U.S. dollar-yen spot rate is 109.00¥/$. Further, the current nominal 360-day…

A: The forward exchange rate refers to the amount of home currency that can be exchanged for one unit…

Q: if the spot rate is NZ$0.50/$ and the forward rate is NZ$0.55/$.The spot exchange rate and the…

A: The spot rates and futures rates in terms of two currencies can be calculated using the exchange…

Q: The Spot Exchange Rate is OMR 0.385030 = 1 USD and 90 days forward rate is OMR 0.394030 = 1USD (Home…

A: Based on the above spot and future rates, it can be seen that the USD is trading at a premium.

Q: 15. Calculate the current exchange rate AUD/GBP, given these two quotes: AUD/USD 0.5640-50 GBP/USD…

A: The Cross rate is the foreign rate that tells us the exchange rate between the two country's…

Q: Use the information below to answer the following questions. Currency per U.S. $ 1.2380 1.2353…

A: STEP 1 The risk-free rate is the interest a potential investor may get over a certain time period…

Q: 8: Calculate the cross rate between the Costa Rican colón (CRC) and the Canadian dollar (CAD) from…

A: In doing international business sometime, to convert into another currency indirectly third currency…

Q: Given the below quotes for the Japanese Yen and the Malaysian Ringgit, calculate the MYR/JPY cross…

A: USD/JPY 110.38 i.e. USD1 = JPY 110.38 USD/MYR 0.43. i.e. USD 1 = 0.43 MYR

Q: Let the spot rate be Yen 100 / $ and the 3-month forward rate be Yen 99/$. Compute the interest rate…

A: Interest rate differentials are generally used to determine the difference between the rate of…

Q: You are given the following quotes: U.S. dollar/Mexican Peso = 0.2501 U.S. dollar/Australian Dollar…

A: To calculate the cross rate for Chines Yuan/Australian Dollar, simply divide U.S. Dollar /Australian…

Q: Assume that the indirect quote is for 115 Japanese yen per U.S.dollar and that the direct quote is…

A: Computation of Exchange rate of 1Euro is equal to how many yen: The exchange rate is given: 1US$=115…

Q: Estimate the one-year EUR interest rate

A: We can determine the one year interest rate in Europe by rearranging the formula below:

Q: places, e.g. 32.16.) in the forward market than in the spot market. b. The three month forward rate…

A: When forward rate is more than spot rate then the forward rate is at premium to the spot rate and…

Q: ppose the spot price of a euro in dollars is $0.932. The U.S. interest rate for 90 days is 6.875%…

A: With spot exchange rate ( S=Units of currency 1 per unit of currency 2), interest rate in country of…

Q: would be the price of a nut ontion on the sam

A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…

Q: Suppose you have the following spot exchange rates:   USD/AUD 0.5300 AUD/EUR 1.6428 USD/EUR…

A: Triangular Arbitrage is a trading strategy in which profit is earned from the price differential of…

Q: If the spot rates are $0.50/NZ$ and the spot rate is C$0.55/NZ$. The interest rate in USA is 9% and…

A: The forward exchange rate is the exchange rate at which a bank decides to exchange one currency for…

Q: The NZD is trading at NZD/USD 0.3500, and the SEK is trading at SEK/NZD 0.3100. The SEK/USD cross…

A: In currency market, a cross rate represents a currency pair that does not include the currency of…

Instruments of Foreign Exchange Market

Foreign exchange is a worldwide market in which one nation’s currency is converted into another nation’s currency. In further terms, exchanging of nations currency with foreign currencies. Foreign exchange happens at a specified rate which is termed the foreign exchange rate. The exchange rates are not constant continuously changing as they are derived by market forces of supply and demand. Widely used foreign currencies are the United States- dollar, Euro, Japanese Yen, British pound, and Australian dollar. US- dollar is the most denominated foreign currency. The Euro to US dollar is a widely used currency pair in the forex market as these two currencies represent the world’s enormous economy. Forex trade is simple as exchanging currencies at the bank. The main players of forex markets are the central banks, financial institutions, intermediaries, investments banks, and other banks. Central Bank is the supreme player who decides the currency value of their own nation on the forex market. Mostly foreign exchange-traded at FX market (forex market) when tourists’ visits a foreign country, import, and export happens between two countries.