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(b) The following exchange rates were observed in Dar es Salaam on 30th October 2010. TSHS/US$ TSHSIE Spot 1450 - 1510 2550 - 2670 1
(b) The following exchange rates were observed in Dar es Salaam on 30th October 2010. TSHS/US$ TSHSIE Spot 1450 - 1510 2550 - 2670 1 Year Forward 1550 - 1570 2675 - 2700 Further, it is assumed that cross rate quotations for US$ and are available. Required: (0) With supporting computations, indicate whether the is trading at a forward discount or premium relative to the US$. Use mid-prices to determine the one year forward premium or discount on the relative to the US$. (*) Suppose you have to purchase US$10,000 one year forward. What will be the cost of this transaction in ?. (ii) Compute the percentage bid-ask spread on the spot
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