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The currency board on a local money market has the following information. Currency Spot rates One month forward Three months forward US dollar 1.81011.8113 0.220.18c
The currency board on a local money market has the following information.
Currency Spot rates One month forward Three months forward
US dollar 1.81011.8113 0.220.18c pm 0.620.58c pm
Euro 1.43661.4380 0.100.15c dis 0.320.40c dis
Jap.Yen 192.802194.347 1.0020.960y pm 2.2342.171ypm
Required:
(a)show the spread after one and three months, and
(b)and convert the following into sterling:
(i)Receive $100,000 in one month;
(ii)Pay 40,000,000 yen in three months;
(iii)Pay 250,000 in one month;
(iv)Receive 40,000 in three months; and
(v)Pay $600,000 in one month.
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