Forward Premium / Discount Solve for the 3 month and 6 month forward premium or discount for the Australian dollar in American terms and for the Australian dollar in European terms Use the forward and spot rates from exhibit 5.4. For three months use 94 days for delivery. For six months use 184 days for delivery. LABEL your answers AND INTERPRET your answers. Recall the formulas: Quoted in American Terms: f, = (F( $ j ) S ( $ j )) S( $ j ) 360 # The answer (premium or discount) is how the foreign currency is trading compared to the US dollar for delivery in X days. Quoted in European Terms: f,$ = (F( j $ ) S ( j $ )) S( j $ ) 360 # The answer (premium or discount) is how the US currency is trading compared to the foreign currency for delivery in X days.

A. 3 month forward premium or discount for A$ in American terms

B. 3 month forward premium or discount for A$ in European terms

C. 6 month forward premium or discount for A$ in American terms

D. 6 month forward premium or discount for A$ in European terms

exhibit 5.4

Preview File Edit View Go Tools Window Help 27% O Fri 12:18 AM a 5 O 5.4 @ Q Search V A Crop Screen Shot 2020-0....14.13 PM - Mon - in US$ Per US$ .02832 35.420 .00004500 22220 Screen Shot 2020-0....14.16 PM Screen Shot 2020-0....21.33 PM Currencies May 16, 2016 U.S dollar foreign exchange rates in late New York trading Mon Country/currency in US$ Per US$ Americas Argentina peso .0708 14.134 Brazil real .2856 3.5014 Canada dollar .7755 1.2895 Chile peso .001440 694.28 Colombia peso ,000330 3028.50 Ecuador US dollar 1 1 1 Mexico peso .0546 18.306 Peru new sol .3003 3.330 Uruguay peso 03242 30.8450 Venezuela b. fuerte .100125 9.9875 Asia-Pacific Australian dollar .7289 1.3720 1-mos forward .7280 1.3737 3. mos forward .7264 1.3767 6-mos forward .7242 1.3809 China yuan .1534 6.5205 Hong Kong dollar .1288 7.7637 India rupee 01497 66.805 Indonesia rupiah 0000751 13310 Japan yen 009172 109.03 1-mos forward .009179 108.94 3-mos forward 009198 6-mos forward .009230 108.34 Malaysia ringgit .2483 4.0273 New Zealand dollar .6759 14795 Pakistan rupee 00956 104.60 Philippines peso .0215 46.450 Singapore dollar .7302 1.3695 South Korea won .0008477 1179.66 Taiwan dollar 03064 32.642 Country/currency Thailand baht Vetram dor Europe Czech Rep. koruna Denmark krone Euro area euro 1-mos forward 3-mos forward 6-mos forward Hungary forint Norway Krone Poland Zloty Russia ruble Sweden krona Switzerland franc 1-mos forward 3-mos forward 6-mos forward Turkey lira UK pound 1-mos forward 3-mos forward 3 6-mos forward Middle East/Africa Bahrain dinar Egypt pound Israel Shekel Jordan dinar Kuwait dinar Lebanon pound Saudi Arabia riyal South Africa rand UAE dirham 04186 .1520 1.1321 1.1331 1.1353 1.1389 003593 .1224 2570 01527 .1211 1.0229 1.0242 1.0270 1.0318 3371 1.4402 1.4403 1.4407 1.4416 23.889 6.5795 8833 8825 8808 8780 278.30 8.1732 3.8915 65482 8.2610 9776 .9764 9737 .9692 2.9667 6944 .6943 6941 6937 Screen Shot 2020-0...22.44 PM Screen Shot 2020-0...40.09 PM 108.72 5.4 2.6523 .1133 2617 1.4097 3.3141 0006636 2666 .0650 2723 3770 88298 3.8210 .7094 3017 1507.00 3.7503 15.3900 3.6729 me 2. What is your subject? 1.4407 1.4416 6941 6937 Ita Roman, and then change the font color to Orange, Accent 2 (6 column, 1" ps forward 009179 108.94 Middle East/Africa row a NOV Forma 6 A PE W X Use ti DOCX Preview File Edit View Go Tools Window Help 27% O Fri 12:18 AM a 5 O 5.4 @ Q Search V A Crop Screen Shot 2020-0....14.13 PM - Mon - in US$ Per US$ .02832 35.420 .00004500 22220 Screen Shot 2020-0....14.16 PM Screen Shot 2020-0....21.33 PM Currencies May 16, 2016 U.S dollar foreign exchange rates in late New York trading Mon Country/currency in US$ Per US$ Americas Argentina peso .0708 14.134 Brazil real .2856 3.5014 Canada dollar .7755 1.2895 Chile peso .001440 694.28 Colombia peso ,000330 3028.50 Ecuador US dollar 1 1 1 Mexico peso .0546 18.306 Peru new sol .3003 3.330 Uruguay peso 03242 30.8450 Venezuela b. fuerte .100125 9.9875 Asia-Pacific Australian dollar .7289 1.3720 1-mos forward .7280 1.3737 3. mos forward .7264 1.3767 6-mos forward .7242 1.3809 China yuan .1534 6.5205 Hong Kong dollar .1288 7.7637 India rupee 01497 66.805 Indonesia rupiah 0000751 13310 Japan yen 009172 109.03 1-mos forward .009179 108.94 3-mos forward 009198 6-mos forward .009230 108.34 Malaysia ringgit .2483 4.0273 New Zealand dollar .6759 14795 Pakistan rupee 00956 104.60 Philippines peso .0215 46.450 Singapore dollar .7302 1.3695 South Korea won .0008477 1179.66 Taiwan dollar 03064 32.642 Country/currency Thailand baht Vetram dor Europe Czech Rep. koruna Denmark krone Euro area euro 1-mos forward 3-mos forward 6-mos forward Hungary forint Norway Krone Poland Zloty Russia ruble Sweden krona Switzerland franc 1-mos forward 3-mos forward 6-mos forward Turkey lira UK pound 1-mos forward 3-mos forward 3 6-mos forward Middle East/Africa Bahrain dinar Egypt pound Israel Shekel Jordan dinar Kuwait dinar Lebanon pound Saudi Arabia riyal South Africa rand UAE dirham 04186 .1520 1.1321 1.1331 1.1353 1.1389 003593 .1224 2570 01527 .1211 1.0229 1.0242 1.0270 1.0318 3371 1.4402 1.4403 1.4407 1.4416 23.889 6.5795 8833 8825 8808 8780 278.30 8.1732 3.8915 65482 8.2610 9776 .9764 9737 .9692 2.9667 6944 .6943 6941 6937 Screen Shot 2020-0...22.44 PM Screen Shot 2020-0...40.09 PM 108.72 5.4 2.6523 .1133 2617 1.4097 3.3141 0006636 2666 .0650 2723 3770 88298 3.8210 .7094 3017 1507.00 3.7503 15.3900 3.6729 me 2. What is your subject? 1.4407 1.4416 6941 6937 Ita Roman, and then change the font color to Orange, Accent 2 (6 column, 1" ps forward 009179 108.94 Middle East/Africa row a NOV Forma 6 A PE W X Use ti DOCX