Problem: The foreign exchange quotations shown below are for the Swiss franc (SF) and the U.S. dollar ($).
|
|
U.S. Dollar Equivalent
|
Currency per U.S. Dollar
|
|
|
Wednesday
|
Tuesday
|
Wednesday
|
Tuesday
|
|
|
Bid
|
Ask
|
Bid
|
Ask
|
Bid
|
Ask
|
Bid
|
Ask
|
|
|
|
|
|
|
|
|
|
|
| Spot |
0.6506
|
0.6508
|
0.6536
|
0.6539
|
1.5365
|
1.5370
|
1.5293
|
1.5300
|
|
30 day
|
0.6496
|
0.6500
|
0.6523
|
0.6529
|
1.5385
|
1.5400
|
1.5315
|
1.5330
|
|
90 day
|
0.6470
|
0.6481
|
0.6499
|
0.6515
|
1.5430
|
1.5457
|
1.5350
|
1.5386
|
Answer the following questions based on the exchange rates shown in the table above.
Q1. What is the percentage appreciation/depreciation of the SF using indirect ask quotes for the SF?
Q2. What is the percentage premium/discount on the SF using indirect bid quotes for the dollar? Using a 30-day forward rate?
Q3. A customer wishes to buy the SF on Wednesday. What is the exchange rate for this transaction using indirect quotes for the SF?
Q4. Show the point quotes on Wednesday using indirect quotes for the dollar. Without doing any calculation, can you identify the currency on premium? Also, give a rationale for your answer.