1. What is the premium or discount between the spot rate and the 3-month forward rate...

  

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1. What is the premium or discount between the spot rate and the 3-month forward rate for the Swiss franc on February 20, 2004? What does this imply about the future spot rate for Swiss francs? (See Tables 2.2 and 2.3) Table 2.2 Spot Foreign Exchange Rates Exchange Rate (US. Dollars) Currency November 15, 2001 February 20, 2004 Dollar Pound Dollar Rupee Yen Rand Switzerland Franc European Union Euro Table 2.4 Futures Contract Quotation Country Australia Britain Canada India Japan South Africa $0.5183 $1.4322 $0.6302 $0.02084 $0.008173 $0.1046 $0.6020 $0.8819 $0.7703 $1.8601 $0.7480 Source: The Wall Street Journal (November 16, 2001) CI $0.02209 $0.009167 $0.1491 $0.7931 $1.2524 Lifetime Open Open High Low Settle Change High Low Interest Contract Date Euro FX (CME)-Euro 125,000, $ per Euro Dec. 8817 8844 8796 Mr 02 8789 8804 8775 8772 8800 8765 8757 -0016 9275 8365 Est. vol. 14,814; vol. Wed 31,261; open int. 113,031, +4,224. June 21 8805 -0017 9632 8337 11,093 8777-0017 9640 8336 1,680 212 Table 2A.1 2004 Corporate Tax Rates Taxable income Up to $50,000 $50,001 $75,000 $75,001-$100,000 $100,001 $335,000 $335,001-$10,000,000 $10,000,001-$15,000,000 $15,000,001-$18,333,333 Over $18,333,333 Marginal Tax Rate 15% 25% 34% 39% 34% 35% 38% 35% $ 5 S e addol 15 capture to under the Tax Reimo 1996 15 x under the Re Recon Tax Calculation Base Tax+ (Marginal Tax Rate x Amount over Base Income) 0+ (15%Amount over $0) 7.500 (25% x Almount over $50,000) (34% x Amount over $75,000) 13.750 $ 22,250 (39% x Amount over $100,000) $ 113,900 (34 % x Amount over $335,000) $3,400,000 (35% x Amount over $10,000,000) $5,150,000 (38% x Amount over $15,000,000) 35% x Taxable Income Act of 1993 1. What is the premium or discount between the spot rate and the 3-month forward rate for the Swiss franc on February 20, 2004? What does this imply about the future spot rate for Swiss francs? (See Tables 2.2 and 2.3) Table 2.2 Spot Foreign Exchange Rates Exchange Rate (US. Dollars) Currency November 15, 2001 February 20, 2004 Dollar Pound Dollar Rupee Yen Rand Switzerland Franc European Union Euro Table 2.4 Futures Contract Quotation Country Australia Britain Canada India Japan South Africa $0.5183 $1.4322 $0.6302 $0.02084 $0.008173 $0.1046 $0.6020 $0.8819 $0.7703 $1.8601 $0.7480 Source: The Wall Street Journal (November 16, 2001) CI $0.02209 $0.009167 $0.1491 $0.7931 $1.2524 Lifetime Open Open High Low Settle Change High Low Interest Contract Date Euro FX (CME)-Euro 125,000, $ per Euro Dec. 8817 8844 8796 Mr 02 8789 8804 8775 8772 8800 8765 8757 -0016 9275 8365 Est. vol. 14,814; vol. Wed 31,261; open int. 113,031, +4,224. June 21 8805 -0017 9632 8337 11,093 8777-0017 9640 8336 1,680 212 Table 2A.1 2004 Corporate Tax Rates Taxable income Up to $50,000 $50,001 $75,000 $75,001-$100,000 $100,001 $335,000 $335,001-$10,000,000 $10,000,001-$15,000,000 $15,000,001-$18,333,333 Over $18,333,333 Marginal Tax Rate 15% 25% 34% 39% 34% 35% 38% 35% $ 5 S e addol 15 capture to under the Tax Reimo 1996 15 x under the Re Recon Tax Calculation Base Tax+ (Marginal Tax Rate x Amount over Base Income) 0+ (15%Amount over $0) 7.500 (25% x Almount over $50,000) (34% x Amount over $75,000) 13.750 $ 22,250 (39% x Amount over $100,000) $ 113,900 (34 % x Amount over $335,000) $3,400,000 (35% x Amount over $10,000,000) $5,150,000 (38% x Amount over $15,000,000) 35% x Taxable Income Act of 1993

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It is given that Spot rate for Swiss franc 06020 Future rate 07931 Since the Franc ... View the full answer