Question
Assume the following spot and forward rates for the euro ($/euro). spot rate $1.6277 30-day forward rate 1.6330 90-day forward rate 1.6353 120-day forward rate
Assume the following spot and forward rates for the euro ($/euro).
spot rate $1.6277
30-day forward rate 1.6330
90-day forward rate 1.6353
120-day forward rate 1.6387
A) What is the dollar value of one euro in the spot market?
B) Suppose you issued a 120-day forward contract to exchange 200,000 euros into Canadian dollars. How many dollars are involved?
C) How many euros can you get for one dollar in the spot market?
D) What is the 120-day forward premium?
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Fundamentals of Investment Management
Authors: Geoffrey Hirt, Stanley Block
10th edition
0078034620, 978-0078034626
