Q14 and Q15 are linked:

Your name is Martina. You work as the CFO of a US company that deals extensively with South African

companies. You know that you will be receiving 28 mio SAR (South African Rand) in exactly 3 months from now. Martina's company wishes to sell the 28 mio SAR in the 3 month forward market and buy USD, receiving the USD in 3 months time.

Martina calls three banks, First National Bank of Johannesburg (FNB Joburg), Barclays and Citibank, and asks for quotes on the number of SAR per USD.

The following quotes are made by the three banks:

SAR per USD (bid-ask) - the 3 month forward rate is the 3 month outright forward rate.

Spot rate 3 month forward rate

FNB Joburg: 12.1450 - 12.1525 12.3560 - 12.3660

Barclays: 12.1470 - 12.1515 12.3590 - 12.3690

Citibank: 12.1480 - 12.1555 12.3600 - 12.3800

Q14: With which bank will Martina optimally trade?

(a) FNB Joburg

(b) Barclays

(c) Citibank

(d) Deal with Oliver the Finance Pug because --- well, why not?!?!

Group of answer choices

(a) FNB Joburg

(b) Barclays

(c) Citibank

(d) Deal with Oliver the Finance Pug because --- well, why not?!?!