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1.Consider a 11 month forward contract on an asset that is expected to provide an income equal to1 % of the asset price once every 1 months. The risk-free rate of interest with continuous compounding is 9 % per annum. The initial asset price is $ 49.
Suppose that 3 months later, the asset price increases by 0.81 % and risk-free interest rate remains the same, what is the value of short forward contract ? Round your final answer to 4 decimal places.

2.Suppose that the current spot price of one US dollar is 1.3322 Swiss Franc, the U.S. interest rate is 5 %p.a., the Swiss interest rate is 3 %p.a. and the 7 month forward price of USD/CHF is 1.3526. Suppose the arbitraguer starts with 5,084 units of Swiss Franc, what is arbitrage profit in the US dollar? All interest rates are quoted with continuously compounding. Round your final answer to 4 decimal places.

3.HoleSale Inc, USA exports manhole covers to Japan and Germany. Over the next six month, the company anticipates sales of 14,880 units to Japan and 961 units to Germany. The price of manhole covers is set at JPY 1,199 and EUR 166 in Japan and Germany respectively. The following information is given:

- The standard deviation of the JPY/USD exchange rate is 5
- The standard deviation of the EUR/USD exchange rate is 0.09
- The correlation of the JPY/USD and EUR/USD exchange rate is 0
- The standard deviation of the EUR/USD six-month forward rate is 0.09

HoleSale Inc. is going to use the EUR/USD forward market to hedge all currency risk across countries to which it sells its product by booking a single forward contract that minimises the company's risk. How many units of this contract should the firm buy/sell? Round your answer to zero decimal place.

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