What is the annualized interest rate on swiss francs

Reference no: EM13897870

1. If the 30-day yen interest rate is 3% p.a., and the 30-day euro interest rate is 5% p.a. What is the magnitude of the forward premium or discount on the yen?

2. Suppose the spot rate is CHF1.4706 > $, and the 180-day forward rate is CHF1.4295 >$. If the 180- day dollar interest rate is 7% p.a., what is the annualized 180-day interest rate on Swiss francs that would prevent arbitrage?

3. As a trader for Goldman Sachs, you see the follow- ing prices from two different banks:

1-year euro deposits> loans: 6.0%-6.125% p.a.
1-year Malaysian ringgit deposits> loans: 10.5%- 10.625% p.a.
Spot exchange rates: MYR4.6602> EUR-MYR4.6622
> EUR
1-year forward exchange rates: MYR4.9500 > EUR- MYR4.9650 > EUR

The interest rates are quoted on a 360-day year. Can you do a covered interest arbitrage?

Reference no: EM13897870

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