1. A bank sells a three against six $3,000,000 FRA for a three-month period beginning three months from today and ending six months from today. The purpose of the FRA is to cover the interest rate risk caused by the maturity mismatch from having made a three-month Eurodollar loan and having accepted a six-month Eurodollar deposit. The agreement rate with the buyer is 5.52 percent. There are actually 92 days in the three-month FRA period. Assume that three months from today the settlement rate is 4.885 percent. Determine how much the FRA is worth and who pays whothe buyer pays the seller or the seller pays the buyer. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

2. A bank sells a three against six $3,000,000 FRA for a three-month period beginning three months from today and ending six months from today. The purpose of the FRA is to cover the interest rate risk caused by the maturity mismatch from having made a three-month Eurodollar loan and having accepted a six-month Eurodollar deposit. The agreement rate with the buyer is 5.63 percent. There are actually 92 days in the three-month FRA period. Assume that three months from today the settlement rate is 6.19 percent. Determine how much the FRA is worth and who pays whothe buyer pays the seller or the seller pays the buyer. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

3. Consider 8.7 percent Swiss franc/U.S. dollar dual-currency bonds that pay $666.67 at maturity per SF1,000 of par value. It sells at par. In dollars, what is the implicit SF/$ exchange rate at maturity? Will the investor be better or worse off at maturity if the actual SF/$ exchange rate is SF1.37/$1.00? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

4. A five-year, 5.0 percent Euroyen bond sells at par. A comparable risk five-year, 6.5 percent yen/dollar dual-currency bond pays $846.33 at maturity. It sells for 110,000. What is the implied /$ exchange rate at maturity? Hint: The dual-currency bond pays 6.5 percent on a notional value of 100,000, whereas the par value of the bond is not necessarily equivalent to 100,000. (Do not round intermediate calculations. Round your answer to 3 decimal places.)

5. On the Tokyo Stock Exchange, Honda Motor Company stock closed at 2,921 per share on Monday, June 6, 2016. Honda trades as an ADR on the NYSE. One underlying Honda share equals one ADR. On June 6, 2016, the /$ exchange rate was 107.71/$1.00. (Round your answer to 2 decimal places.)