Question
I. Assume the following spot and forward rates for the New Zealand dollar (US$/NZD). Spot Rate US$ 0.6317 per NZD 30-day forward rate US$ 0.6330
I. Assume the following spot and forward rates for the New Zealand dollar (US$/NZD). Spot Rate US$ 0.6317 per NZD 30-day forward rate US$ 0.6330 per NZD 90-day forward rate US$ 6353 per NZD a) Suppose you issued a 30-day forward contract to exchange 200,000 New Zealand dollars into U.S. dollars. How many U.S. dollars do you get? b) What is the 30-day forward discount/premium? Is the NZD selling at a discount or a premium?
II. Suppose a Swedish krona sells for $0.1625 and a British pound sells for $1.6523. What is the exchange rate (cross rate) of the Swedish krona to the British pound? That is, how many Swedish kronas are equal to one British pound?
Please provide detail explanation with formulas and clearly step by step. Thanks in advance for your support.
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