Question
VERY URGENT PLSSS Subject:international finance Question 1 Samad Zain, an exchange trader wants to invest RM3,000,000 or the equivalent current at prevailing market rate. He
VERY URGENT PLSSS
Subject:international finance
Question 1 Samad Zain, an exchange trader wants to invest RM3,000,000 or the equivalent current at prevailing market rate. He is analyzing forex exchange opportunity between Malaysia and New Zealand. The followings are the selected information of both countries:
Country | Inflation Rate | Interest Rate |
Malaysia | 3.5% | 4.6% |
New Zealand | 4.1% | 6.4% |
Exchange rate
Units of foreign currency per unit of Malaysian Ringgit | Bid | Ask |
N e w Zealand Dollar | $0.3889 | $0.3878 |
Bank Negara's Forward Swap Rate (360-day): 42- 36 Note: [The calculation is to be based on four (4) decimal points to minimize rounding errors.] Required:
e. What is the appropriate 360-day forward exchange rate fi Interest Rate Parity prevail? (Hint: Use middle rate) (3 Marks) F. Calculate the expected spot rate in 360-day for bid and ask based on Purchasing Power Parity (PPP). (3 Marks)
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