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you are given the following hypothetical quotes. Spot exchange rates: :$ 1.1865 - 1.1870 $: 108.10 - 108.20 Three month rates (percents per year) in
you are given the following hypothetical quotes.
Spot exchange rates:
:$ 1.1865 - 1.1870
$: 108.10 - 108.20
Three month rates (percents per year)
in $5 - 5 1/4
In 3 1/4 - 3 1/2
In 1 1/4 - 1 1/2
What should the quotes be for the following? (Please show all calculations)
A) : spot exchange rate
B) :$ three month forward exchange rate. (Hint: Buying euros forward is equivalent to borowing dollars to buy euros spot and investing the euros).
C) $: three month forwad bid exchange rate.
D) $: three month forward bid and ask exhange rate.
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