Question
QUESTION 1. Your company will receive AUD2,000,000 in 90 days. To convert this amount into USD, you contact a bank to sell AUD forward. Here
QUESTION 1. Your company will receive AUD2,000,000 in 90 days. To convert this amount into USD, you contact a bank to sell AUD forward. Here is the information you got:
90-day forward rate: AUD1 = USD0.85
Today spot rate: AUD1 = USD0.90
After 90 days, market spot rate is AUD1 = USD0.92
If you choose to sell forward, how much USD will you receive?
QUESTION 2. Your company will receive AUD2,000,000 in 90 days. To convert this amount into USD, you contact a bank to sell AUD forward. Here is the information you got: 90-day forward rate: AUD1 = USD0.85 Today spot rate: AUD1 = USD0.90 After 90 days, market spot rate is AUD1 = USD0.92 If you choose to sell forward then
A. The amount of USD you received will be determined today and can't be changed | |
B. The amount of USD you received will be determined today but you can still sell AUD to other bank with better rate | |
C. The amount of USD you received can't be determined today since you sell AUD in the future | |
D. The amount of USD you received can't be determined today since the exchange rate is not known yet | |
E. The amount of USD you received will be determined today and you will adjust that amount periodically. |
QUESTION 3. Your company will receive AUD2,000,000 in 90 days. To convert this amount into USD, you contact a bank to sell AUD forward. Here is the information you got: 90-day forward rate: AUD1 = USD0.85 Today spot rate: AUD1 = USD0.90 After 90 days, market spot rate is AUD1 = USD0.92 90-day Forward rate premium/discount is?
QUESTION 4. Your company will receive AUD2,000,000 in 90 days. To convert this amount into USD, you contact a bank to sell AUD forward. Here is the information you got: 90-day forward rate: AUD1 = USD0.85 Today spot rate: AUD1 = USD0.90 After 90 days, market spot rate is AUD1 = USD0.92 During that 90-day period:
A. AUD depreciates less than 3% | |
B. AUD depreciates between 3% and 5% | |
C. AUD depreciates between 5% and 7% | |
D. AUD appreciates less than 3% | |
E. AUD appreciates between 3% and 5% | |
F. AUD appreciates between 5% and 7% |
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