Question: QUESTION 3 (25 Marks) Calculate the one year forward rate if euro spot rate is $1.80 and if one year forward rate has a forward

QUESTION 3 (25 Marks)

  1. Calculate the one year forward rate if euro spot rate is $1.80 and if one year forward rate has a forward premium of 4 percent.

(5 Marks)

  1. Calculate the one year forward rate if CAD spot rate is $0.80 and if one year forward rate has a forward premium of 4 percent.

(5 Marks)

  1. If the AUDs one year forward rate is quoted at $0.90 and the AUDs spot rate is quoted at $0.85, find the forward premium.

(5 Marks)

  1. Refer the information given below, and find the forward rate with justification whether its premium or discount.

Type of exchange rate

Value

Maturity

Forward rate premium/discount for euro

Spot rate

$1.5500

30-day forward rate

$1.5490

30 days

90-day forward rate

$1.5410

90 days

180-day forward rate

$1.5397

180 days

please answer all

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