Exchange rates assignment | Business & Finance homework help

These are 4 business finance questions that I need computed. Work needs to be shown. Question, 1, 2, 5 and 7. 

 

 

1.The Wall Street Journal reported the following spot and forward rates for the Swiss franc ($/SF).

Spot …………………………………………… 30-day forward ……………………………. 90-day forward ……………………………. 180-day forward …………………………..

$0.8202 $0.8244 $0.8295 $0.8343

a.Was the Swiss franc selling at a discount or premium in the forward market? b.What was the 30-day forward premium (or discount)? c.What was the 90-day forward premium (or discount)? d.Suppose you executed a 90-day forward contract to exchange 100,000 Swiss

francs into U.S. dollars. How many dollars would you get 90 days hence? e.Assume a Swiss bank entered into a 180-day forward contract with Bankers

Trust to buy $100,000. How many francs will the Swiss bank deliver in six

months to get the U.S. dollars

 

2. Suppose a Polish zloty is selling for $0.3414 and a British pound is selling for

1.4973. What is the exchange rate (cross rate) of the Polish zloty to the British

pound? That is, how many Polish zlotys are equal to a British pound?

 

5. An investor in the United States bought a one-year Brazilian security valued at 195,000 Brazilian reals. The U.S. dollar equivalent was 100,000. The Brazilian security earned 16 percent during the year, but the Brazilian real depreciated 5 cents against the U.S. dollar during the time period ($0.51 to $0.46). After transferring the funds back to the United States, what was the investor’s return on her $100,000? Determine the total ending value of the Brazilian investment in Brazilian reals and then translate this Brazilian value to U.S. dollars. Then compute the return on the $100,000.

 

 

7. .You are the vice president of finance for Exploratory Resources, headquartered in Houston, Texas. In January 2010, your firm’s Canadian subsidiary obtained a six-month loan of 150,000 Canadian dollars from a bank in Houston to finance the acquisition of a titanium mine in Quebec province. The loan will also be repaid in Canadian dollars. At the time of the loan, the spot exchange rate was U.S. $.8995/Canadian dollar and the Canadian currency was selling at a discount in the forward market. The June 2010 contract (face value 5 C$150,000 per con- tract) was quoted at U.S. $0.8930/Canadian dollar.

a.Explain how the Houston bank could lose on this transaction assuming no hedging.

b.If the bank does hedge with the forward contract, what is the maximum amount it can los

 

 

 







Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more