Question: Problem 21-1 Spot and forward rates [LO21-2] I need help with part B and C please! The Wall Street Journal reported the following spot and

Problem 21-1 Spot and forward rates [LO21-2]

I need help with part B and C please!

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


Spot	$	0.8226
30-day forward	$	0.8552
90-day forward	$	0.8564
180-day forward	$	0.8611

a. Was the Swiss franc selling at a discount or premium in the forward market?

Premium (Answer is Premium)
Discount

b. What was the 30-day forward premium (or discount) percentage? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) (The answer is NOT 3.96)

c. What was the 90-day forward premium (or discount) percentage? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) (The answer is NOT 4.11)

d. Suppose you executed a 90-day forward contract to exchange 340,000 Swiss francs into U.S. dollars. How many dollars would you get 90 days hence? (The answer is 291,176)

e. Assume a Swiss bank entered into a 180-day forward contract with Bankers Trust to buy $340,000. How many francs will the Swiss bank deliver in six months to get the U.S. dollars? (Round your answer to 2 decimal places.) (The answer is 394,843.80)

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