Compute the forward discount or premium
WebMar 7, 2024 · Forward discount or premium Not what you're looking for? Search our solutions OR ask your own Custom question. Forward Premium: Compute the forward discount or Premium for the Mexican peso whose 90-day forward rate is $ .102 and spot rate is $ .10. State whether your answer is a discount or premium. Thank you. WebNov 28, 2024 · The spot rate ¥ / $ rate is = 109.38. Calculation for annualized forward premium = ( (109.50-109.38÷109.38) x (360 ÷ 90) x 100% = 0.44% In this case, the …
Compute the forward discount or premium
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WebForward Premium. A forward premium is a situation when the forward exchange rate is higher than the spot exchange rate. Conversely, a forward discount is when the … WebCompute the forward discount or premium for the Mexican peso whose 90-day forward rate is $.102 and spot rate is $.10. State whether your answer is a discount or …
WebCompute the forward discount or premium for the Mexican peso whose 90-day forward rate is $.102 and spot rate is $.10. State whether your answer is a discount or premium. Forward... Webcalculate and interpret a forward discount or premium;
WebCompute the forward discount or premium for the Mexican peso whose 90 day forward rate is $ .102 and spot rate is $ .10 . State whether your answer is a discount or premium..... ANSWER_____: (F - S) / S =($.098 - $.10) / $.10 (360/90) = .02, or 2%, which reflects a 8% discount 10. Forward versus Currency Option Contracts. What are the ... WebJan 8, 2024 · The addition of forward points to a spot rate is known as a forward premium, and the subtraction of forward points to a spot rate is known as a forward discount. A …
WebSave. 13K views 3 years ago. This video shows you how to calculate foreign currency forward premium/discount, and how different interest rates can cause the forward to …
WebSOLUTIONS: a. Forward Premium = (i $/4 - i £/4)/(1+i £/4) = (0.06/4 - 0.08/4) / (1 + 0.08/4) = -0.004902; which implies -1.96% per annum. £ is at a forward discount. b. (F-S)/S = (i $/4 - i £/4)/(1+i £/4); which implies F = S + S * (i $/4 - i £/4)/(1+i £/4); F = $1.55/£ + $1.55/£ * -0.004902 = $1.542402/£. 3. robotic wives movieWebNov 20, 2024 · 1- Forward Premium. Compute the forward discount or premium for the Mexican peso whose 90-day forward rate is $.102 and spot rate is $.10. State whether your answer is a discount or premium. a 2- Speculating with Currency Futures. Assume that a... robotic wood laser cutterrobotic worm that can swim through sandWebWhat is the forward discount or premium associated with buying 90-day Swiss francs? ANSWER. The annualized forward premium = [(0 - 0)/0]x 4 = 0%. ... The annualized forward premium = [(0 - 0)/0]x 4 = 0%. c. Compute the percentage bid-ask spreads on spot and forward Swiss francs. ANSWER. The bid-ask spread is calculated as follows: 1 robotic wireWebOct 26, 2024 · Is the pound trading at a discount or at a premium relative to the dollar in the forward market? b. Compute the annualized forward discount or premium on the pound relative to the dollar. View Solution: Suppose that the spot pound in dollars exchange rate is 1 Approved Answer BASANT S answered on October 26, 2024 3 Ratings ( 15 Votes) robotic wire cutterWebCalculate the forward discount or premium for the following spot and three-month forward rates: (a) SR = SF2/¤1 and SF2.02/¤1 where SF is the Swiss franc and ¤ is the euro (b) SR = ¥200/$1 and FR = ¥190/$1 7. Assume that SR = $2/£1 and the three-month FR = $1.96/£1. How can an importer who will have to pay £10,000 in three months … robotic wolvesWebSep 5, 2024 · The difference between the forward rate and spot rate is known as swap points. If this difference (forward rate minus spot rate) is positive, it is known as a forward premium ; a negative... robotic wrench