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Question 2 Assume Deutsche Bank quotes the following exchange rates for Swedish krona (SEK), Omani rial (OMR) and Malaysian ringgit (MYR): Spot (SEK/MYR) SEK2.0600/MYR -
Question 2 Assume Deutsche Bank quotes the following exchange rates for Swedish krona (SEK), Omani rial (OMR) and Malaysian ringgit (MYR): Spot (SEK/MYR) SEK2.0600/MYR - SEK2.0780/MYR 90-day forward (SEK/MYR) 60 - 80 basis points Spot (MYR/OMR) MYR10.3000/OMR - MYR10.3820/OMR 90-day forward (MYR/OMR) 120 - 90 basis points Required: (a) Calculate 90-day outright forward rates for SEK/MYR and MYR/OMR. (8 marks) (b) Calculate the spot cross rates for SEKIOMR. (6 marks) (c) Al-Johan is a car distributor based in Oman. It has imported 30 sports cars worth SEK 4,800,000 from a sports car manufacturer based in Stockholm, Sweden. The invoice is due today. Calculate the total payment in OMR needed to settle this payable. (2 marks)
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