a) The NZD/MYR exchange rate is MYR1 = NZD0.3650 and the MYR/BTN exchange rate is BTN1...

a) The NZD/MYR exchange rate is MYR1 = NZD0.3650 and the MYR/BTN exchange rate is BTN1 = MYR0.1022. What is the BTN/NZD?

b) The USD/EUR exchange rate is EUR1 = USD0.95 and the EUR/SFr exchange rate is SFr1 = EUR0.71. What is the SFr/USD?

c) An investor wishes to buy euros spot at $0.9080/€ and sell euros forward for 180 days at $0.9146/€. What is the forward premiums or discount on 180-day euros?

d) Martin Kauer, a foreign exchange trader in Switzerland, has CHF 4,000,000 for shortterm money market investment and wants to make profit based on the following rates. Explain specific steps that Martin must take to make a covered interest arbitrage. State your answer in CHF.

6-month Swiss interest rate:	1.60% per annum
6-month Yen interest rate:	2.95% per annum
Spot rate:	¥ 93.1395/SFr.
6-month Forward Rate	¥ 93.8380/SFr.

Expert Solution

jeff jeffy answered 1 year ago

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Dealer A quotes 1.5053 – 62 for the EUR/NZD exchange rate to company XYB. Calculate : (i) the price at which A is willing to buy the EUR (ii) the price at which company XYB can buy the NZD (iii) the price at which A is willing to sell the EUR (iv) the price at which company XYB can sell the NZD (v) the dealer’s spread (vi) Dealer A also quotes EUR/USD 1.1832 – 700. Calculate USD/NZD.

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a) The NZD/MYR exchange rate is MYR1 = NZD0.3650 and the MYR/BTN exchange rate is BTN1...

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