Question $3$

See the quotes below and answer the following questions:

a$.$ The current exchange rate of the New Zealand dollar in European terms is NZD$1\mathrm{.}6487/$

USD. What is the mid rate for the $9-$month forward on the NZD in European terms?

What is the $9-$month mid forward exchange rate in American terms?

b$.$ Calculate the annualized forward premium$/$ discount for the NZD$.$ Is the NZD trading at a

premium or a discount versus the US dollar for delivery in $9$ months? For simplicity,

assume $30$ days in each month.

c$.$ Currently the $9-$month forward exchange rate for the Canadian dollar is USD $0\mathrm{.}74345/$

CAD. Use your answer in part a$.$ and determine the forward cross$-$exchange rate between

the Canadian dollar and the NZD$.$ Show the forward cross$-$rates in "Candain" terms

$($CAD$/$NZD$).$

U$.$S$.$ Dollar$/$New Zealand Dollar $(^$USDNZD$)$

$1\mathrm{.}6487+0\mathrm{.}0212(+1\mathrm{.}30\%)\frac{02}{02}\frac{?}{24}[$FOREX$]$

FORWARD RATES for Fri, Feb $2$nd$,2024$