What is the annualized interest rate on swiss francs

Assignment Help Finance Basics

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

Questions Cloud

What is a money market hedge and how is it constructed : What is a money market hedge? How is it constructed? Suppose you are the French representative of a company selling soap in Canada.

What is the term structure of interest rates : What is a pure discount bond? What is the term structure of interest rates? How are spot interest rates determined from coupon bond prices?

What is the actual present value of the prize : If the Prize Patrol visits your house to inform you that you have won, it offers you $333,333.33 each and every year for 30 years. If the interest rate is 8% p.a., what is the actual present value of the $10,000,000 prize?

What forward exchange rate prevent covere interest arbitrage : The interest rate on a similar pure discount euro-denominated bond is 7.5% p.a. If the current spot rate is $1.08> :, what forward exchange rate prevents covered interest arbitrage?

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

Briefly list a historical evolution of epidemiology : Briefly list a historical evolution of epidemiology

What times in the reference frames of the earth : Two rockets A and B depart from Earth at steady speeds of 0.6c in opposite directions, having synchronized clocks with each other and with Earth at departure. After one year as measured in Earth's reference frame, rocket B emits a light signal. At..

Examples of roman engineering : This posting utilizes three examples of Roman engineering to provide the following information:

Greek work of art and one roman work : This posting chooses one Greek work of art and one Roman work of art and compares and contrasts them according to the criteria listed:

User Account

All Pages