1 compute the forward rates to cover the foreign currency exposures for MJ Pte Ltd

Question 2 Assume you are a trader with Cintech Bank in the US. From the quote screen on your computer terminal, you notice that Mercy Bank is quoting 0.7235/$1.00 and Credit DT is offering SF1.1304/$1.00. You learn that Union Bank of Switzerland (UBS) is making a direct market between the Swiss franc and the euro, with a current /SF quote of 0.6332 Assume you have $6,000,000 with which to conduct the arbitrage and ignore bid-ask spreads for this trading. Besides, you have a subsidiary company located in Singapore, namely MJ Pte Ltd. MJ Pte Ltd imports pharmaceuticals products from the US. It is expected the coming quarter invoices that bill from the US is as follows: In one month's time In two months' time In three months' time US$ 2 million US$ 3.5 million US$ 6 million MJ decides to use the forward market to cover its foreign currency exposure. The following are a Singapore bank quoted USS spot rate and forward points: Offer 1.3636 Spot One month Two months Three months Six months Bid 1.3620 32 53 87 125 44 76 108