Exchange Rates Assignment – savvyessaywriters.net | Savvy Essay Writers
Exchange Rates Assignment – savvyessaywriters.net | Savvy Essay Writers
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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 $0.8343a.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 Swissfrancs 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 BankersTrust to buy $100,000. How many francs will the Swiss bank deliver in sixmonths to get the U.S. dollars2. Suppose a Polish zloty is selling for $0.3414 and a British pound is selling for1.4973. What is the exchange rate (cross rate) of the Polish zloty to the Britishpound? 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