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We have the following current spot ex-rates: A. $1.0842 / € B. ¥123.2253 / $ C. $1.5028 / £ D. BRL 3.6720 / $ (Brazilian real) a. Assume that the dollar is expected to steadily depreciate at a rate of 6% over the next year. Calculate and report the 3-month, 6-month and 12-month forward rates (F3, F6, F12) based on the expected change of 6% over the year using the original spot rate for each calculation. Quote all 4 ex-rates as they are quoted above, and do not reverse any of the quotes. Show forward rates for each currency separately in the exact order above. b. Assume that the dollar is expected to steadily appreciate at a rate of 9% over the next year. Calculate and report the 3-month, 6-month and 12-month forward rates (F3, F6, F12) based on the expected 9% change over the year using the original spot rate for each calculation. Quote all 4 ex-rates as they are quoted above and do not reverse any of the quotes. Show each currency separately in the exact order above. Please explain clearly.

Financial Management, Finance

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