Task:
Foreign Currency Dollars in
In Dollars Foreign Currency
Britain (Pound) 1.6317 0.6129
30 day fut 1.6277 0.6144
60 day fut 1.6238 0.6158
90 day fut 1.6204 0.6171
Indonesia (Rupiah) 0.000611 1635.75
Japan (Yen) 0.006993 143.00
Switzerland (Franc) 0.6691 1.4945
30 day fut 0.6710 1.4904
60 day fut 0.6730 1.4858
90 day fut 0.6743 1.4830
Question 1: What is the quote in direct terms for the British pound sterling and the US dollars on spot exchange?
Question 2: Is the Japanese yen at a premium or a discount to the US dollar in the forward market?
Question 3: To which type of foreign exchange participants would the forward price of the Japanese yen be important
Question 4: Suppose you are a Swiss exporter of watches. If you are to be paid in US dollars three months from now for a shipment made to the United States worth $100,000, how many Swiss francs would you receive if you locked in the price today with a forward? Would you sell or buy the dollar forward?
Question 5: Calculate the U.K. pound – Indonesian rupiah cross rate for spot exchange in terms of the US dollar. Do the same for the yen – Swiss franc cross rate.