Question: QUESTION 2 (25 Marks) a) Calculate the one year forward rate if euro spot rate is $1.90 and if one year forward rate has a

QUESTION 2 (25 Marks) a) Calculate the one year forward rate

QUESTION 2 (25 Marks) a) Calculate the one year forward rate if euro spot rate is $1.90 and if one year forward rate has a forward premium of 5 percent. (5 Marks) b) Calculate the one year forward rate if CAD spot rate is $0.90 and if one year forward rate has a forward premium of 5 percent. (5 Marks) c) If the AUD's one year forward rate is quoted at $0.92 and the AUD's spot rate is quoted at $0.86, find the forward premium. (5 Marks) d) Refer the information given below, and find the forward rate with justification whether it's premium or discount. Value Maturity Forward rate premium/discount for euro Type of exchange rate Spot rate $1.5520 30 days 90 days 30-day forward $1.5490 rate 90-day forward $1.5410 rate 180-day forward $1.5397 rate 180 days

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