a) As a currency trader, you take note of the following foreign exchange rates and interest...

 

Transcribed Image Text:

a) As a currency trader, you take note of the following foreign exchange rates and interest rates quotes. There are several different exchange rate circumstances for currency transaction. Spot rate Per Unit of British Pound (GBP) RM5.3030/55 Per Unit of Euro Dollar (EUR) RM4.7100/35 KL London Frankfurt 6-month interest rate 6 percent 5 percent 6.5 percent You are required to show your workings based on the given information of foreign exchange rates and interest rates quotes. i) Calculate the 6-month forward rates in MYR per unit of GBP and per unit of EUR respectively. ii) Compute the spot bid-ask percentage spread in MYR per unit of GBP and per unit of EUR respectively. iii) Compute the spot and 6-month rate in EUR per unit of GBP. iv) Determine the amount of MYR would you receive now if you exchange with EUR5,000. a) As a currency trader, you take note of the following foreign exchange rates and interest rates quotes. There are several different exchange rate circumstances for currency transaction. Spot rate Per Unit of British Pound (GBP) RM5.3030/55 Per Unit of Euro Dollar (EUR) RM4.7100/35 KL London Frankfurt 6-month interest rate 6 percent 5 percent 6.5 percent You are required to show your workings based on the given information of foreign exchange rates and interest rates quotes. i) Calculate the 6-month forward rates in MYR per unit of GBP and per unit of EUR respectively. ii) Compute the spot bid-ask percentage spread in MYR per unit of GBP and per unit of EUR respectively. iii) Compute the spot and 6-month rate in EUR per unit of GBP. iv) Determine the amount of MYR would you receive now if you exchange with EUR5,000.

Answer rating: 100% (QA)

i Calculating the 6month forward rates For GBP Forward Rate Spot Rate 1 Foreign Interest Rate 1 Dome... View the full answer