Question
The following are quotes from a currency dealer in the New York currency market: Currency Spot quote Australian dollar (AUD/USD) 0.7832 - 0.7834 Brazilian real
The following are quotes from a currency dealer in the New York currency market:
Currency | Spot quote |
Australian dollar (AUD/USD) | 0.7832 - 0.7834 |
Brazilian real (USD/BRL) | 3.2335 - 3.2365 |
British pound (GBP/USD) | 1.3507 - 1.3509 |
Canadian dollar (USD/CAD) | 1.2555 - 1.2557 |
Euro (EUR/USD) | 1.1948 - 1.1949 |
Japanese yen (USD/JPY) | 111.44 - 111.45 |
Mexican peso (USD/MXP) | 19.3653 - 19.3718 |
New Zealand dollar (NZD/USD) | 0.7181 - 0.7184 |
Thai baht (USD/THB) | 32.1240 - 32.1430 |
Egyptian pound (USD/EGP) | 17.6860 - 17.8460 |
South Korean won (USD/KRW) | 1067.53 - 1069.53 |
Swiss franc (USD/CHF) | 0.9789 - 0.9791 |
Forward prices are quoted as the absolute (not percentage) forward premium or discount in basis points (one basis point = .0001).
Currency | Period | Forward premium/discount |
Brazilian real (USD/BRL) | 9 month | 1017 1120 |
Euro (EUR/USD) | 6 month | 143 144 |
New Zealand dollar (NZD/USD) | 1 year | -19 -15 |
Swiss franc (USD/CHF) | 3 month | -58 -56 |
7a. If the dealers spot and forward quotes for the euro () are given above, what are the dealers bid and ask prices for a 6-month forward contract on the euro?
b. If a customer were to enter a forward contract with this dealer to sell $1m to obtain euros, how many euros would the customer receive in 6 months?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started