The Wall Street Journal reported the following spot and forward rates for the Swiss franc ($/SF).
|
|
|
| Spot |
$ |
.8205 |
| 30-day forward |
$ |
.8510 |
| 90-day forward |
$ |
.8543 |
| 180-day forward |
$ |
.8590 |
a. Was the Swiss franc selling at a discount or premium in the forward market?
Premium
Discount
b. What was the 30-day forward premium (or discount)? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
30-day forward premium/discount %
c. What was the 90-day forward premium (or discount)? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
90-day forward premium/discount %
d. Suppose you executed a 90-day forward contract to exchange 130,000 Swiss francs into U.S. dollars. How many dollars would you get 90 days hence?
Dollars for Swiss francs
e. Assume a Swiss bank entered into a 180-day forward contract with Bankers Trust to buy $130,000. How many francs will the Swiss bank deliver in six months to get the U.S. dollars? (Round your answer to 2 decimal places.)
Swiss francs for dollars SF