Please show calculations to understand each problem

Suppose you work for XYZ Bank. A customer who wants to buy GBP 6-months forward approached you. What is the forward rate that you would quote if your bank requires 1% flat profit over the breakeven rate? (You can round your results to third decimal and mark the closest answer) GBP/USD 1.6500-1.6580 RUSD: 5.50-6.50% pa RGBP:9.00-10.00%pa

A)

1.6382

B)

1.5866

C)

1.6545

D)1.6020

2) ABC Inc. has CAD20,000,000 interest payment due on September 19th and is concerned about a possible CAD appreciation. The premium for September 19th call option on Canadian dollar is $0.04, and the strike price is $0.80. Assume that on September 19 the spot rate for the Canadian dollar rose to $0.92. What is the USD cost of interest payment for ABC Inc. ?

A) 20,000,000

B) 16,800,000

C) 15,400,000

D) 12,000,000

3)

A US importer, who incurs costs in Euro's and bills its customers in USD, is concerned about the depreciation of USD against Euro due to EURO payables of 10,000,000 in a month. To hedge (protect himself/herself) the position, importer decides to use futures markets. Currently EURO contracts (125,000 EURO each) are traded at $0.8470. Spot rate is $0.8310 (ie EUR/USD 0.8310). Suppose the importer takes an equal futures position to its cash market position (Euro10m) at $0.8470. Assume that futures contract price and spot rates are $0.8600, $0.8540 respectively when the hedge is liquidated. What should be the unit cost of EURO for the importer in terms of USD?

	A)	0.8600
	B)	0.8540
	C)	0.8670
	D)	0.8410