A foreign exchange trader gives the following quotes for, Ask an Expert

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A foreign exchange trader gives the following quotes for the Ruritanian doppel spot, one-month, three-month and six-month to a US-based treasurer.

(a) Calculate the outright quotes for one, three and six months forward.

(b) If the treasurer wished to buy Ruritanian doppels three months forward, how much would he or she pay in dollars?

(c) If he or she wished to purchase US dollars one month forward, how much would the treasurer have to pay in Ruritanian doppels?

(d) Assuming that Ruritanian doppels are being bought, what is the premium or discount, for the one-, three- and six-month forward rates in annual percentage terms?

(e) What do the above quotations imply in respect of the term structure of interest rates for US dollars and Ruritanian doppels?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92079823

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