Use the handout distributed on Oct 9 for all quotes. You have to show your work in order to get full credit. Forward rates: use the 9-month EUR/USD a) Compute the bid/ask spread for the spot and the 9-month forward rates. Compare and explain. b) What would be the cost in dollars of hedging 500,000 euros of payables? c) If you are a German MNC needing to hedge 500,000 USD of receivables, what is the euro amount you will get? d) Compute the annualized forward premium/discount for the bid EUR/USD Forward Rates - Investing.com orward Rates 106.82 106.86 Ask High Time Chg. 0.0300 0.0160 -0.0010 0.1000 11:56:00 11:57:00 11:58:00 11:58:00 USD/JPY SPOT Name USDJPY ON FWD USDJPY TN FWD USDJPY SN FWD USDJPY SW FWD USDJPY 2W FWD USDJPY 3W FWD USDJPY 1M FWD USDJPY 2M FWD USDJPY 3M FWD USDJPY 4M FWD USDJPY 5M FWD USDJPY 6M FWD USDJPY 7M FWD USDJPY 8M FWD USDJPY 9M FWD USDJPY 10M FWD USDJPY 11M FWD USDJPY 1Y FWD USDJPY 15M FWD 0.2500 0.1600 Low -0.6500 -0.6900 -0.6500 -4.5900 -9.4200 -14.3900 -23.1000 -41.6900 -71.7300 -0.6400 -0.5950 -0.3450 -4.4600 -9.1500 -13.9300 -22.3300 -40.3900 -70.6600 -89.5500 -106.6400 -127.1100 -144.5700 11:58:00 11:58:00 11:58:00 11:58:00 0.7900 0.2800 0.6700 11:58:00 1.3500 1.1600 1.7000 3.2500 2.0100 11:58:00 11:58:00 11:58:00 11:58:00 11:58:00 11:58:00 11:58:00 Bid -0.8200 -0.6600 -0.6710 -4.5200 -9.2400 - 14.0300 -22.4700 -40.8800 -70.9600 -89.8300 -107.1400 -127.5200 -145.5000 - 162.3700 -180.6000 -198.5800 -213.2700 -233.1300 -290.9300 -384.7800 -437.2400 -626.0000 -844.9900 -1034.0000 - 1263.0000 - 1527.3000 - 1673.0000 -1868.0000 -2058.0000 -3611.0000 -4196.0000 4942.0000 -5683.8101 -0.5200 -0.6000 -0.6020 -4.5000 -9.0800 -13.9200 -22.3900 -40.5800 -70.3700 -89.0800 -106.1400 -126.4800 -143.5500 -159.9700 -179.0000 -195.2800 -211.7700 -231.4700 -284.9300 -376.3800 -419.2400 -618.0000 -807.4900 -1016.0000 -1201.0000 - 1427.3000 -1590.0000 -1775.0000 -1954.0000 -3486.0000 -4056.0000 -4792.0000 -5559.4502 -161.7500 -179.9000 -196.9500 -212.6300 -232.5000 -285.0000 -382.7400 -428.5000 -626.0000 3.6200 4.2200 5.5000 4.0400 3.8100 11:58:00 11:58:00 11:28:00 11:28:00 11:28:00 USDJPY 21M FWD 8.5000 7.0600 USDJPY 2Y FWD -92.0500 -108.3500 -130.3000 -147.7500 -164.7500 -184.1000 -201.8000 -217.8000 -237.6000 -294.4000 -391.0000 448.0000 -656.0000 -858.5000 -1075.0000 -1232.0000 -1454.9100 -1631.5000 -1821.5000 -2006.0000 -3548.5000 -4126.0000 -4867.0000 -5621.6299 USDJPY 3Y FWD USDJPY 4Y FWD USDJPY 5Y FWD USDJPY 6Y FWD USDJPY 7Y FWD USDJPY 8Y FWD USDJPY 9Y FWD USDJPY 10Y FWD USDJPY 12Y FWD USDJPY 15Y FWD USDJPY 20Y FWD USDJPY 30Y FWD -828.5000 -1032.0000 -1232.0000 - 1490.3900 -1631.5000 -1821.5000 -2006.0000 -3548.5000 -4126.0000 -4867.0000 -5621.6299 19.3000 7.7100 34.5000 0.0000 42.3100 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 11:28:00 11:28:00 11:28:00 07/10 6:31:00 07/10 07/10 07/10 07/10 07/10 07/10 07/10 10/8/2019 Forward Rates - Investing.com 1.0994 Ask Chg. Time 11:54:00 0.1040 -0.0100 -0.0050 -0.0300 0.0100 0.0300 11:55:00 11:55:00 11:55:00 11:55:00 11:55:00 11:55:00 11:56:00 11:55:00 11:55:00 -0.8300 0.0300 -0.0800 11:55:00 Forward Rates EUR/USD SPOT (1.099 Name Bid EURUSD ON FWD 0.7240 EURUSD TN FWD 0.7400 EURUSD SN FWD 0.7550 EURUSD SW FWD 5.3300 EURUSD 2W FWD 10.8200 EURUSD 3W FWD 16.3100 EURUSD 1M FWD 25.1600 EURUSD 2M FWD 45.7500 EURUSD 3M FWD 74.6100 EURUSD 4M FWD 95.9300 EURUSD 5M FWD 115.2400 EURUSD 6M FWD 137.6500 EURUSD 7M FWD 157.4700 EURUSD 8M FWD 176.4700 EURUSD 9M FWD 196.6800 EURUSD 10M FWD 216.4100 EURUSD 11M FWD 235.9300 EURUSD 1Y FWD 257.3300 EURUSD 15M FWD 317.9300 EURUSD 21M FWD 425.2600 EURUSD 2Y FWD 481.5000 EURUSD 3Y FWD 701.4700 EURUSD 4Y FWD 917.3000 EURUSD 5Y FWD 1138.2900 EURUSD 6Y FWD 1362.7500 EURUSD 7Y FWD 1578.0000 EURUSD 8Y FWD 1793.0000 EURUSD 9Y FWD 1997.0000 EURUSD 10Y FWD 2203.1599 EURUSD 12Y FWD 2731.0000 EURUSD 15Y FWD 3139.0000 EURUSD 20Y FWD 3834.0000 EURUSD 30Y FWD 5259.3999 0.7530 0.7700 0.7810 5.4300 10.9400 16.4700 25.3700 46.0500 75.4700 96.7300 116.4000 141.6500 159.3400 177.4700 198.1800 218.1600 237.3300 259.1800 321.9300 428.8500 491.0300 710.3700 932.3000 1153.6801 1381.5699 1608.0000 1828.0000 2037.0000 2236.6699 2806.0000 3239.0000 3984.0000 5277.3999 High 0.7930 0.7930 0.7800 5.4200 10.9600 16.4600 26.0400 46.3800 75.8900 97.2300 116.8300 141.2500 160.6200 179.3700 199.8100 220.5300 240.4700 262.6500 323.7700 436.3100 494.5000 722.0700 943.9000 1169.7000 1396.0000 1625.0000 1839.0000 2052.0000 2264.6001 2768.5000 3189.0000 3909.0000 5268.3999 Low 0.7320 0.6990 0.7690 5.3500 10.7100 16.1400 25.1500 45.8300 74.5000 96.1000 115.8000 138.2500 157.6600 177.2000 197. 1500 217.1800 236.6700 257.5900 317.9600 427.7000 483.9700 709.0000 932.0500 1153.6801 1381.5100 1608.0000 1828.0000 2037.0000 2236.5701 2768.5000 3189.0000 3909.0000 5268.3999 -0.7600 -0.5200 2.0300 -1.4600 -1.5500 -0.8900 -0.9000 -2.4000 -1.2300 4.1200 -2.3400 -4.3700 11:55:00 11:55:00 11:55:00 11:55:00 11:56:00 11:55:00 11:55:00 11:25:00 11:26:00 11:26:00 11:25:00 11:25:00 -6.8300 -12.8000 -13.3100 -17.2500 -24.0000 -29.0000 -35.0000 -36.8400 0.0000 0.0000 0.0000 0.0000 11:26:00 11:25:00 11:26:00 11:25:00 11:26:00 11:26:00 07/10 07/10 07/10 07/10 Use the handout distributed on Oct 9 for all quotes. You have to show your work in order to get full credit. Forward rates: use the 9-month EUR/USD a) Compute the bid/ask spread for the spot and the 9-month forward rates. Compare and explain. b) What would be the cost in dollars of hedging 500,000 euros of payables? c) If you are a German MNC needing to hedge 500,000 USD of receivables, what is the euro amount you will get? d) Compute the annualized forward premium/discount for the bid EUR/USD Forward Rates - Investing.com orward Rates 106.82 106.86 Ask High Time Chg. 0.0300 0.0160 -0.0010 0.1000 11:56:00 11:57:00 11:58:00 11:58:00 USD/JPY SPOT Name USDJPY ON FWD USDJPY TN FWD USDJPY SN FWD USDJPY SW FWD USDJPY 2W FWD USDJPY 3W FWD USDJPY 1M FWD USDJPY 2M FWD USDJPY 3M FWD USDJPY 4M FWD USDJPY 5M FWD USDJPY 6M FWD USDJPY 7M FWD USDJPY 8M FWD USDJPY 9M FWD USDJPY 10M FWD USDJPY 11M FWD USDJPY 1Y FWD USDJPY 15M FWD 0.2500 0.1600 Low -0.6500 -0.6900 -0.6500 -4.5900 -9.4200 -14.3900 -23.1000 -41.6900 -71.7300 -0.6400 -0.5950 -0.3450 -4.4600 -9.1500 -13.9300 -22.3300 -40.3900 -70.6600 -89.5500 -106.6400 -127.1100 -144.5700 11:58:00 11:58:00 11:58:00 11:58:00 0.7900 0.2800 0.6700 11:58:00 1.3500 1.1600 1.7000 3.2500 2.0100 11:58:00 11:58:00 11:58:00 11:58:00 11:58:00 11:58:00 11:58:00 Bid -0.8200 -0.6600 -0.6710 -4.5200 -9.2400 - 14.0300 -22.4700 -40.8800 -70.9600 -89.8300 -107.1400 -127.5200 -145.5000 - 162.3700 -180.6000 -198.5800 -213.2700 -233.1300 -290.9300 -384.7800 -437.2400 -626.0000 -844.9900 -1034.0000 - 1263.0000 - 1527.3000 - 1673.0000 -1868.0000 -2058.0000 -3611.0000 -4196.0000 4942.0000 -5683.8101 -0.5200 -0.6000 -0.6020 -4.5000 -9.0800 -13.9200 -22.3900 -40.5800 -70.3700 -89.0800 -106.1400 -126.4800 -143.5500 -159.9700 -179.0000 -195.2800 -211.7700 -231.4700 -284.9300 -376.3800 -419.2400 -618.0000 -807.4900 -1016.0000 -1201.0000 - 1427.3000 -1590.0000 -1775.0000 -1954.0000 -3486.0000 -4056.0000 -4792.0000 -5559.4502 -161.7500 -179.9000 -196.9500 -212.6300 -232.5000 -285.0000 -382.7400 -428.5000 -626.0000 3.6200 4.2200 5.5000 4.0400 3.8100 11:58:00 11:58:00 11:28:00 11:28:00 11:28:00 USDJPY 21M FWD 8.5000 7.0600 USDJPY 2Y FWD -92.0500 -108.3500 -130.3000 -147.7500 -164.7500 -184.1000 -201.8000 -217.8000 -237.6000 -294.4000 -391.0000 448.0000 -656.0000 -858.5000 -1075.0000 -1232.0000 -1454.9100 -1631.5000 -1821.5000 -2006.0000 -3548.5000 -4126.0000 -4867.0000 -5621.6299 USDJPY 3Y FWD USDJPY 4Y FWD USDJPY 5Y FWD USDJPY 6Y FWD USDJPY 7Y FWD USDJPY 8Y FWD USDJPY 9Y FWD USDJPY 10Y FWD USDJPY 12Y FWD USDJPY 15Y FWD USDJPY 20Y FWD USDJPY 30Y FWD -828.5000 -1032.0000 -1232.0000 - 1490.3900 -1631.5000 -1821.5000 -2006.0000 -3548.5000 -4126.0000 -4867.0000 -5621.6299 19.3000 7.7100 34.5000 0.0000 42.3100 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 11:28:00 11:28:00 11:28:00 07/10 6:31:00 07/10 07/10 07/10 07/10 07/10 07/10 07/10 10/8/2019 Forward Rates - Investing.com 1.0994 Ask Chg. Time 11:54:00 0.1040 -0.0100 -0.0050 -0.0300 0.0100 0.0300 11:55:00 11:55:00 11:55:00 11:55:00 11:55:00 11:55:00 11:56:00 11:55:00 11:55:00 -0.8300 0.0300 -0.0800 11:55:00 Forward Rates EUR/USD SPOT (1.099 Name Bid EURUSD ON FWD 0.7240 EURUSD TN FWD 0.7400 EURUSD SN FWD 0.7550 EURUSD SW FWD 5.3300 EURUSD 2W FWD 10.8200 EURUSD 3W FWD 16.3100 EURUSD 1M FWD 25.1600 EURUSD 2M FWD 45.7500 EURUSD 3M FWD 74.6100 EURUSD 4M FWD 95.9300 EURUSD 5M FWD 115.2400 EURUSD 6M FWD 137.6500 EURUSD 7M FWD 157.4700 EURUSD 8M FWD 176.4700 EURUSD 9M FWD 196.6800 EURUSD 10M FWD 216.4100 EURUSD 11M FWD 235.9300 EURUSD 1Y FWD 257.3300 EURUSD 15M FWD 317.9300 EURUSD 21M FWD 425.2600 EURUSD 2Y FWD 481.5000 EURUSD 3Y FWD 701.4700 EURUSD 4Y FWD 917.3000 EURUSD 5Y FWD 1138.2900 EURUSD 6Y FWD 1362.7500 EURUSD 7Y FWD 1578.0000 EURUSD 8Y FWD 1793.0000 EURUSD 9Y FWD 1997.0000 EURUSD 10Y FWD 2203.1599 EURUSD 12Y FWD 2731.0000 EURUSD 15Y FWD 3139.0000 EURUSD 20Y FWD 3834.0000 EURUSD 30Y FWD 5259.3999 0.7530 0.7700 0.7810 5.4300 10.9400 16.4700 25.3700 46.0500 75.4700 96.7300 116.4000 141.6500 159.3400 177.4700 198.1800 218.1600 237.3300 259.1800 321.9300 428.8500 491.0300 710.3700 932.3000 1153.6801 1381.5699 1608.0000 1828.0000 2037.0000 2236.6699 2806.0000 3239.0000 3984.0000 5277.3999 High 0.7930 0.7930 0.7800 5.4200 10.9600 16.4600 26.0400 46.3800 75.8900 97.2300 116.8300 141.2500 160.6200 179.3700 199.8100 220.5300 240.4700 262.6500 323.7700 436.3100 494.5000 722.0700 943.9000 1169.7000 1396.0000 1625.0000 1839.0000 2052.0000 2264.6001 2768.5000 3189.0000 3909.0000 5268.3999 Low 0.7320 0.6990 0.7690 5.3500 10.7100 16.1400 25.1500 45.8300 74.5000 96.1000 115.8000 138.2500 157.6600 177.2000 197. 1500 217.1800 236.6700 257.5900 317.9600 427.7000 483.9700 709.0000 932.0500 1153.6801 1381.5100 1608.0000 1828.0000 2037.0000 2236.5701 2768.5000 3189.0000 3909.0000 5268.3999 -0.7600 -0.5200 2.0300 -1.4600 -1.5500 -0.8900 -0.9000 -2.4000 -1.2300 4.1200 -2.3400 -4.3700 11:55:00 11:55:00 11:55:00 11:55:00 11:56:00 11:55:00 11:55:00 11:25:00 11:26:00 11:26:00 11:25:00 11:25:00 -6.8300 -12.8000 -13.3100 -17.2500 -24.0000 -29.0000 -35.0000 -36.8400 0.0000 0.0000 0.0000 0.0000 11:26:00 11:25:00 11:26:00 11:25:00 11:26:00 11:26:00 07/10 07/10 07/10 07/10