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  • Quiz exam practice foreign exchange rates forward premiums

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    anant_jain88114
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    The document contains sample problems related to foreign exchange rates, currency conversion, interest rates, and forward rates. Some key details: - Problems involve calculating spot and forward exchange rates between various currencies like USD, GBP, EUR, JPY, and more. - Interest rates for different markets like India and US are provided to calculate costs of borrowing or rates of return in different currencies. - Questions determine forward premiums/discounts, synthetic forward rates, and whether arbitrage is possible between markets based on given exchange rates and interest rates. - Solving the problems would help understand concepts like currency conversion, interest rate parity, and arbitrage in foreign exchange markets. However, practicing these sample questions

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    IF

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    Practice Questions 2012-13

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    The document contains sample problems related to foreign exchange rates, currency conversion, interest rates, and forward rates. Some key details: - Problems involve calculating spot and forward exchange rates between various currencies like USD, GBP, EUR, JPY, and more. - Interest rates for different markets like India and US are provided to calculate costs of borrowing or rates of return in different currencies. - Questions determine forward premiums/discounts, synthetic forward rates, and whether arbitrage is possible between markets based on given exchange rates and interest rates. - Solving the problems would help understand concepts like currency conversion, interest rate parity, and arbitrage in foreign exchange markets. However, practicing these sample questions

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Scarica in formato DOC, PDF, TXT o leggi online su Scribd
    Segnala contenuti inappropriati
    114 visualizzazioni2 pagine

    Quiz exam practice foreign exchange rates forward premiums

    Caricato da

    anant_jain88114
    The document contains sample problems related to foreign exchange rates, currency conversion, interest rates, and forward rates. Some key details: - Problems involve calculating spot and forward exchange rates between various currencies like USD, GBP, EUR, JPY, and more. - Interest rates for different markets like India and US are provided to calculate costs of borrowing or rates of return in different currencies. - Questions determine forward premiums/discounts, synthetic forward rates, and whether arbitrage is possible between markets based on given exchange rates and interest rates. - Solving the problems would help understand concepts like currency conversion, interest rate parity, and arbitrage in foreign exchange markets. However, practicing these sample questions

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Scarica in formato DOC, PDF, TXT o leggi online su Scribd
    Segnala contenuti inappropriati
    di 2

    Disclaimer: Practicing these may help quiz/exams does not guarantee results.

    1. The spot and 90 day forward rates of pound are US$1.137 and US$1.175 respectively. What is the forward premium/discount on pound? 2. The spot and 180 day forward rates of are US$1.2250 and US$1.2175 respectively. What is the forward premium/discount on US$? 3. S(/ bid US$) = 120, S(/ ask US$)=125 How many yen would you need to buy 100 US$? How many Yen would you get if you sold 100 US$? What is S(US$/bid ) and S(US$/ask ) 4. S(US$/ bid ) = 1.5230, S(US$/ ask ) 1.5255 Compute S(/ bid US$) , S( / ask US$) 5. S(/ bid US$) = 120, S(/ ask US$)=125 S(US$/ bid ) = 1.5230, S(US$/ ask ) 1.5255 Compute S(/ask ) and S(/ask ) 6. Suppose you have the following spot rates: S(S$/ US$)= 1.81/1.82 S(US$/) = 0.85/0.86 Compute the following rates: a) S(US$/S$) b)S(/US$) c) S(S$/) 7. S(US$/ Euro) = 1.5050/1.5060 S(BHT/US$) = 35.60/35.70 As market user, how many Euros would you need to buy 100 US$? As a market user, if you want to Sell 10,000 BHT, how many US$ will you get? What is S(BHT/Euro)

    8. S(Peso/US$) 9.9850 , F6m(Peso/US$) =10.6050 What is the 6 month forward premium/discount on Peso?

    9. Suppose you have the following information Exchange rate Bid Offer (ask) S(S$/US$) 1.7050 1.7080 S(S$/Euro) 2.020 2.070 S(S$/Pound Stg.) 3.1130 3.1200 S(S$/A$) 1.2130 1.2170 (a) Calculate S(US$/S$) (b) How much of each of the foreign currency can S$10,000 buy? (c) What will be the S$ receipt from a sale of A$5000?

    (d) Suppose you buy Euro for S$10000 and immediately convert Euro back to S$ what is your loss/ gain? (e) Compute S(US$/Euro) exchange rate.

    10. 3m rate of Interest: India (INR) 6.00% 3m rate of Interest: US($) 3.00% Spot USD|INR : 56.00 What is 3 month synthetic forward rate?
    11. Rate of Interest: India (INR) 8% Rate of Interest: US($) 4% Spot USD|INR : 55.00; 3m forward rate: 55.50 What is the cost of borrowing / ROR in Rupee terms if US$ market is accessed by an Indian investor? From Indian investor's perspective, which market is cheaper if one needs to borrow? Which market is better for investment? What is the cost of borrowing / ROR in $ terms if Indian market is accessed by US Investors? Is two way arbitrage feasible i.e., borrow in one currency and invest in the other? What forward rate will prevent arbitrage? 12. Rate of Interest: India 8%/8.5% Rate of Interest: USA 4.0/4.25% Spot USD|INR : 55.50/56.60 3m forward points: 20/30 What is the cost of borrowing / ROR in Rupee terms if US$ market is accessed by an Indian investor? What is the cost of borrowing / ROR in $ terms if Indian market is accessed by US Investors?

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