Question
1. Forward-discount calculation : Suppose the direct 90day forward quote for the Danish kroner in Frankfurt is given to you as EUR 0.2943 - 0.2957
1.Forward-discount calculation:
Suppose the direct 90day forward quote for the Danish kroner in Frankfurt is given to you as EUR 0.2943 - 0.2957 / DKK and spot rate as EUR 0.2921 - 0.2948 / DKK. Based on the bid or ask rates, which currency is at a forward-discount with respect to the other currency? How much is this forward discount? [Hint: Use either bid or ask rates]
(6 points)
a.Please type formula here:
b.Please provide the reasoning for your answer:
c.Calculate the forward-premium here:
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Fundamentals of Investments Valuation and Management
Authors: Bradford D. Jordan, Thomas W. Miller
5th edition
978-007728329, 9780073382357, 0077283295, 73382353, 978-0077283292
