The wall street journal reported the following spot and


Question: The Wall Street Journal reported the following spot and forward rates for the Swiss franc ($/SF) in June of 2009:

1140_Spot.png

a. Was the Swiss franc selling at a discount or premium in the forward market?

b. What was the 30-day forward premium (or discount)?

c. What was the 90-day forward premium (or discount)?

d. Suppose you executed a 90-day forward contract to exchange 100,000 Swiss francs into U.S. dollars. How many dollars would you get 90 days hence?

e. Assume a Swiss bank entered into a 180-day forward contract with Citicorp to buy $100,000. How many francs will the Swiss bank deliver in six months to get the U.S. dollars?

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Finance Basics: The wall street journal reported the following spot and
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