Question
In: Finance
The spot rate for the Singapore dollar is £0.320 and the 30-day forward rate is £0.325....
The spot rate for the Singapore dollar is £0.320 and the 30-day forward rate is £0.325. At what discount or premium is Singapore dollar selling?
Solutions
Expert Solution
Solution:
Spot Rate: 1 Singapore dollar = 
.320
Forward Rate: 1 Singapore dollar =
.325
Hence
is depreciating and trading at discount, this can be understood as
at present we have to pay
.320 for $1 but at 1 month forward we have to pay
0.325 for $1 it means we have to pay more to buy $1 hence
is depreciating.
Annualised depreciation on
= [(Spot - Forward) *12 *100] /( Forward *n)
Annualised depreciation on
= [(0.320 - 0.325) *12 *100] /( 0.325 *1)
Annualised depreciation on
= [( - 0.005) *12 *100] /( 0.325 *1)
Annualised depreciation on
= 6 /0.325
Annualised depreciation on
= 18.46%
jeff jeffy answered 2 years agoRelated Solutions
The existing spot rate of the Singapore dollar is $.62. The one‑year forward rate of the...
The existing spot rate of the Singapore dollar is $.62. The
one‑year forward rate of the Singapore dollar is $.61. The
probability distribution of the future spot rate in one year is
forecasted as follows:
Future
Spot
Rate Probability
$.60 25%
.63 45
.65 30
Assume that one‑year put options on Singapore dollars are
available, with an exercise price of $.64 and a premium of $.04 per
unit. One‑year call options on Singapore dollars are available with
an exercise price of $.61 and a...
The existing spot rate of the Singapore dollar is $.62. The one‑year forward rate of the...
The existing spot rate of the Singapore dollar is $.62. The
one‑year forward rate of the Singapore dollar is $.61. The
probability distribution of the future spot rate in one year is
forecasted as follows:
Future
Spot
Rate Probability
$.60 25%
.63 45
.65 30
Assume that one‑year put options on Singapore dollars are
available, with an exercise price of $.64 and a premium of $.04 per
unit. One‑year call options on Singapore dollars are available with
an exercise price of $.61 and a...
The existing spot rate of the Singapore dollar is $.62. The one‑year forward rate of the...
The existing spot rate of the Singapore dollar is $.62. The
one‑year forward rate of the Singapore dollar is $.61. The
probability distribution of the future spot rate in one year is
forecasted as follows:
Future
Spot
Rate Probability
$.60 25%
.63 45
.65 30
Assume that one‑year put options on Singapore dollars are
available, with an exercise price of $.64 and a premium of $.04 per
unit. One‑year call options on Singapore dollars are available with
an exercise price of $.61 and a...
The Euro -Yen dollar spot rate is £$0.89/¥$. When the45-day forward exchange rate is £$0.90/¥$...
The Euro -Yen dollar spot rate is £$0.89/¥$. When the
45-day forward exchange rate is £$0.90/¥$ then the Euro forward
dollar is selling at
discount or premium of _________%
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$1 million to engage in covered
interest arbitrage? Provide quantitative explanation. (11)If
covered interest arbitrage is feasible, determine the profit the
investor could earn. (111)Is there evidence of interest rate parity
between U.S and Canada? Explain.
1.The current U.S. dollar-yen spot rate is 102¥/$. 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?
The following spot and forward rates for the euro ($/euro) were reported: Spot 1.6381 30-day forward...
The following spot and forward rates for the euro ($/euro) were
reported:
Spot
1.6381
30-day forward
1.6380
90-day forward
1.6380
180-day forward
1.6387
a-1. Was the euro selling at a discount or
premium in the forward market at 30 days.
Discount
Premium
a-2. Was the euro selling at a discount or
premium in the forward market at 90 days.
Premium
Discount
a-3. Was the euro selling at a discount or
premium in the forward market at 180 days.
Premium
Discount...
The following spot and forward rates for the euro ($/euro) were reported: Spot 1.6360 30-day forward...
The following spot and forward rates for the euro ($/euro) were
reported:
Spot
1.6360
30-day forward
1.6359
90-day forward
1.6359
180-day forward
1.6366
a-1. Was the euro selling at a discount or
premium in the forward market at 30 days.
Premium
Discount
a-2. Was the euro selling at a discount or
premium in the forward market at 90 days.
Discount
Premium
a-3. Was the euro selling at a discount or
premium in the forward market at 180 days.
Discount
Premium...
Assume that the spot rate is €0.8144/$, the 180-day forward rate is €0.7933/$, and the 180-day...
Assume that the spot rate is €0.8144/$, the 180-day forward rate
is €0.7933/$, and the 180-day dollar interest rate is 6 percent per
year. What is the 180-day euro interest rate per year that would
prevent arbitrage?
The consumer price index for the United States (U.S.) rose from
approximately 121.4 in 1990 to approximately 199.3 in 2010.
a. How much inflation was there in the U.S. during the
twenty-year period?
b. What is the significance of the consumer price index...
The spot rate of the US dollar is 70/USD and the three month forward rate is...
The spot rate of the US dollar is 70/USD and the three month
forward rate is INR 72/USD. Is the rupee trading at discount t or
premium?
The 90-day interest rate is 1.5% in the US and 4% in India. The
current spot exchange rate is INR 70/USD. What will be the 90-day
forward rate? (CIP)
The current spot rate for the JPY is INR 1.55. The expected
inflation is 8% in India and 1.5% in Japan. What is the...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- A palindrome is a string whose reversal is identical to the string. For example, 110010011 is...
- Explain how the shape of the load duration curve for a particular system affects the selection...
- For physics discussion post. Please TYPE the response as I struggle with reading written information. Explain...
- Consider a file system using a multi-level indexing scheme in inodes as the file organization. In...
- 1a) A sample of a new cleaning product, "Joe's Famous Bleach Cleaner," with a mass of...
- TRANSPARANT DATA ENCRYPTION TOPIC INTRODUCTION 150WORDS, DESCRIPTION 250 WORDS, CONCLUTION 150 WORDS USE OWN WORDS 500 WORDS....
- What do you consider an appropriate co-occurring diagnosis for an adolescent substance use disorder compared to...
ADVERTISEMENT