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Please help Walter is a US resident and thinking of sending his son to university in Singapore. As such, he intends to accumulate SGD via
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Walter is a US resident and thinking of sending his son to university in Singapore. As such, he intends to accumulate SGD via a dual currency investment. He postulates that he will require approximately SGD 150,000 His banker gave him the following indications Investment Sum Base Currency: Alternate Currency: Interest Rate Tenor USD 110,000 USD SGD 3% (at 200 pips away) 1 month Current USD SGD Rate: If Walter wishes to enter a strike price of 200 pips away, what is the strike price? (a) (2 marks) (a) Assuming at maturity, USDSGD is trading at 1.3722. What current and amount will Walter receive? Please show all calculations (6 marks) (b) If conversation has taken place, what is Walter's breakeven? (2 marks) (c) List the components of a dual currency investment product and what are 2 key (4 marks) risks of such investments. Walter is a US resident and thinking of sending his son to university in Singapore. As such, he intends to accumulate SGD via a dual currency investment. He postulates that he will require approximately SGD 150,000 His banker gave him the following indications Investment Sum Base Currency: Alternate Currency: Interest Rate Tenor USD 110,000 USD SGD 3% (at 200 pips away) 1 month Current USD SGD Rate: If Walter wishes to enter a strike price of 200 pips away, what is the strike price? (a) (2 marks) (a) Assuming at maturity, USDSGD is trading at 1.3722. What current and amount will Walter receive? Please show all calculations (6 marks) (b) If conversation has taken place, what is Walter's breakeven? (2 marks) (c) List the components of a dual currency investment product and what are 2 key (4 marks) risks of such investments
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