The following is market information: Current spot rate of pound = $1.23 90-day forward rate of...

The following is market information: Current spot rate of pound = $1.23 90-day forward rate of pound = $1.24 3-month deposit rate in U.S. = 1.1% 3-month deposit rate in Great Britain = 1.3% If you have $250,000 and use covered interest arbitrage for a 90-day investment, what will be the amount of U.S. dollars you will have after 90 days?

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jeff jeffy answered 2 hours ago

The following is market information: Current spot rate of pound = $1.45 90-day forward rate of...

The following is market information: Current spot rate of pound = $1.45 90-day forward rate of pound = $1.46 3-month deposit rate in U.S. = 1.1% 3-month deposit rate in Great Britain = 1.3% If you have $250,000 and use covered interest arbitrage for a 90-day investment, what will be the amount of U.S. dollars you will have after 90 days?

Consider the following market information: Spot rate for the Canadian dollar C$....$0.80 90 day forward rate...

Consider the following market information: Spot rate for the Canadian dollar C$....$0.80 90 day forward rate for the C$........$0.79 90 day Canadian interest rate….....4% 90 day U.S. interest rate……………2.5% (1)Given this information, would it be feasible for a U.S. investor with US$1 million to engage in covered interest arbitrage? Provide quantitative explanation. (11)If covered interest arbitrage is feasible, determine the profit the investor could earn. (111)Is there evidence of interest rate parity between U.S and Canada? Explain.

The spot rate on the London market is £0.5510/$, while the 90-day forward rate is £0.5586/$. What is the annualized forward premium or discount on the British pound?

The spot rate on the London market is £0.5510/$, while the 90-day forward rate is £0.5586/$. What is the annualized forward premium or discount on the British pound? (Round answer to 2 decimal places, e.g. 17.54%. Use 360 days for calculation.) Forward premium or (discount) Entry field with incorrect answer 10.01 %

1 A) The 90-day forward rate for the euro is $1.08, while the current spot rate...

1 A) The 90-day forward rate for the euro is $1.08, while the current spot rate of the euro is $1.05. What is the annualized forward premium or discount of the euro? 11.4% discount 11.4% Premium 7.6% premium 7.6% discount 1 B) Assume that a speculator purchases a put option on British pounds (with a strike price of $1.50) for $.05 per unit. A pound option represents 31,250 units. Assume that at the time of the purchase, the spot rate...

Managing Transaction Exposures Assume the following information: • Spot rate: CHF/USD = 0.7142 • 90-day forward...

Managing Transaction Exposures Assume the following information: • Spot rate: CHF/USD = 0.7142 • 90-day forward rate: CHF/USD = 0.7114 • USD 90-day interest rate: 3.75% (APR) • CHF 90-day interest rate: 5.33% (APR) The option data for July contracts is given the table below. Strike price (CHF/USD) Call Premium Put Premium 0.70 2.55¢ per CHF 1.42¢ per CHF 0.72 1.55¢ per CHF 2.4¢ per CHF A. U.S. Company ABC, which exports to Switzerland, expects to receive CHF 450,000 in...

1.The current U.S. dollar-yen spot rate is 102¥/$. If the 90-day forward exchange rate is 101¥/$...

1.The current U.S. dollar-yen spot rate is 102¥/$. If the 90-day forward exchange rate is 101¥/$ what is the forward exchange premium or discount for ¥$. 2.Assume the current U.S. dollar-British spot rate is 0.71£/$. If the current nominal one-year interest rate in the U.S. is 2.7% and the comparable rate in Britain is 3.9%, what is the approximate forward exchange rate for 180 days?

Managing Transaction Exposures Assume the following information: Spot rate: CHF/USD = 0.7142 90-day forward rate: CHF/USD...

Managing Transaction Exposures Assume the following information: Spot rate: CHF/USD = 0.7142 90-day forward rate: CHF/USD = 0.7114 USD 90-day interest rate: 3.75% (APR) CHF 90-day interest rate: 5.33% (APR) The option data for July contracts is given the table below. Strike price (CHF/USD) Call Premium Put Premium 0.70 2.55¢ per CHF 1.42¢ per CHF 0.72 1.55¢ per CHF 2.4¢ per CHF 1-U.S. Company ABC, which exports to Switzerland, expects to receive CHF 450,000 in 90 days. Should Company ABC...

Forward quotes: a) What is a 90 days forward quote if direct euro for pound spot...

Forward quotes: a) What is a 90 days forward quote if direct euro for pound spot rate is 1.5432 and euro trades at 2.46% forward discount? b) What is a 30 days forward quote if the indirect dollar for Swiss franc quote is 0.9753 and Swiss franc trades at 1.35% forward premium? c) What is a 60 day forward quote if the price of a US dollar in Geneva is 1.0204-1030 and 60 day points are 35-43? d) What is...

Suppose the pound/$ spot rate is (pound symbol) .7996, the 3-month forward rate is (pound symbol)...

Suppose the pound/$ spot rate is (pound symbol) .7996, the 3-month forward rate is (pound symbol) .7923, short-term interest rates in the US and Britain are .025% and .0637% respectively, use the theory of (un)covered interest rate parity to show why investors may or may not decide to invest $2m in the US or UK. Is the pound in a forward premium or discount? Why?

Spot and forward exchange rates for the British pound are as follows: Spot exchange rate =...

Spot and forward exchange rates for the British pound are as follows: Spot exchange rate = 1.4500 USD/GBP, 90-day forward exchange rate =1.4416 USD/GBP, 180-day forward exchange rate = 1.4400 USD/GBP. Additionally, a 180-day European call option to buy 1 GBP for USD 1.42 costs 3 cents, and a 90-day European put option to sell 1 GBP for USD 1.49 costs 3 cents. Which of the following is the correct arbitrage strategy? Select one: Buy the 90-day forward contract and...

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