The current spot exchange rate is $1 9691 and the three month forward rate is $1 9558 (Bid) and $1 9568 (Ask) Here, $ refers to the United States Dollar and refers to the British pound On the basis of your analysis, you are pretty confident that the spot exchange rate will be $1 84 in three months Assume that you would like to buy or sell 1,000,000 What actions do you need to take to speculate in the forward market Explain in no more than 1 2 sentences (30 60 words maximum) What is the expected dollar profit from speculation (in terms of ) The current US Treasury bill rate is 0 19 per annum and the Australian Treasury bill rate is 3 1 per annum The spot rate in Sydney is USD0 8299 per 1AUD i e AUD USD 0 8299 The 3 month forward rate is currently USD0 8319 per 1AUD Is the USD at a forward premium or discount Show your workings

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Posted on Oct 07, 2024

The current spot exchange rate is $1.9691/ and the three-month forward rate is $1.9558/ (Bid) and $1.9568 (Ask). Here, $ refers to the United States

The current spot exchange rate is $1.9691/ and the three-month forward rate is $1.9558/ (Bid) and $1.9568 (Ask). Here, $ refers to the United States Dollar and refers to the British pound. On the basis of your analysis, you are pretty confident that the spot exchange rate will be $1.84/ in three months. Assume that you would like to buy or sell 1,000,000.

What actions do you need to take to speculate in the forward market? Explain in no more than 1-2 sentences (30-60 words maximum)

What is the expected dollar profit from speculation (in terms of )?

The current US Treasury bill rate is 0.19% per annum and the Australian Treasury bill rate is 3.1% per annum. The spot rate in Sydney is USD0.8299 per 1AUD i.e. AUD/USD 0.8299. The 3-month forward rate is currently USD0.8319 per 1AUD. Is the USD at a forward premium or discount? Show your workings.