Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

can I get those answers asap please subject- International Financial Management [30 Marks] Q.3. Solve the following 2 numericals A) Consider the following data:- GBP/USD

image text in transcribed

image text in transcribed

can I get those answers asap please

subject- International Financial Management

[30 Marks] Q.3. Solve the following 2 numericals A) Consider the following data:- GBP/USD spot 1.7500/10 GBP/USD 3m fwd: 1.7380/1.7400 3months dollar interest rate = 8.1% 3 months pound sterling interest rate = 11% A British firm has a 3 month dollar receivable of USD 500,000. The 2 options available to the firm are:- a. The British firm is an importer/exporter)? [1 Mark] b. Cover the receivable in the forward market [4 Marks] c. Borrow in dollars today and convert it to pounds in the spot market. Invest the pounds in the local market for 3 months. The receivables in dollars can be used to repay the dollar loan after 3 months. [6 Marks] What is the British company's receivable under both the options. [2 Marks) Which option would he go for [2Marks] Q.3 B) Given the following information, calculate the rates given below: [15 Marks) EUR/USD GBP/USD USD/JPY USD/CHF USD/INR 1.1175/76 1.2785/86 110.80/82 0.9695/97 72.50/52 Spot Forward points 1 month 2 months 3 months 6 months 0.0008/09 0.0007/08 -0.09/08 0.0017/18 0.0011/12 -0.28/26 0.0023/24 0.0019/20 -0.37/35 0.0065/67 0.0045/47 -0.71/69 -0.0012/10 0.22/25 -0.0025/23 0.29/32 -0.0035/33 0.38/41 -0.0065/63 0.50/53 1. EUR/GBP spot two-way price [4 Marks] 2. Sell GBP/USD 2 months forward [2 Marks) 3. Sell CHF/INR 3 months forward [2 marks] 4. Buy EUR/JPY 1 month forward [2 Marks] 5. A British trader bought GBP10million at 1.2650. She closes her position at the spot rate given above. How much loss or profit in INR, has she made? [5 Marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Planning & Analysis And Performance Management

Authors: Jack Alexander

1st Edition

1119491487, 9781119491484

More Books

Students also viewed these Finance questions

Question

=+ ^ What is the budget for this project?

Answered: 1 week ago

Question

=+What information is needed?

Answered: 1 week ago