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What is annualized forward premium or discount on british

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Management of Carla Vista, Inc., an electronic games manufacturer, is planning to purchase flash memory from one of two sources. Kyoto, Inc., quotes a price of ¥5,800 per gigabyte. The current exchange rate is ¥102.80/$. Another Japanese manufacturer offers to supply the same flash memory at a price of €57.50 per gigabyte.

Question 1: The spot rate available is ¥164.48/€. (Round answers to 2 decimal places, e.g. 15.25.)

Cost from Vendior 1 per gigabyte?
Cost from vendor 2 per gigabyte?

Question 2: The spot rate on the London market is £0.5535/$, while the 90-day forward rate is £0.5592/$. What is the annualized forward premium or discount on the British pound? (Round answer to 2 decimal places, e.g. 17.54%. Use 360 days for calculation.)

Question 3: The foreign exchange department of Bank of America has a bid quote on Canadian dollars (C$) of C$0.9288/$. If the bank typically tries to make a bid-ask spread of 0.5 percent on these foreign exchange transactions. what will the asking rate have to be?

Reference no: EM132873612

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