1. As the treasurer of Fitz Industries, you wish to sell Sterling (GBP) in exchange for US Dollars (USD) for delivery in three months (91 days). The following data is available:
What forward rate would you expect the bank to quote ?
1.5455
1.5468
1.5471
1.5474
1.5526
A US based automobile manufacturer using only US originated inputs and selling cars only in the United States has
No foreign exchange exposure.
Exposure to the US Dollar/Yen nominal exchange rate.
Exposure to the relative inflation rates in Japan and the US
Exposure to the real US Dollar/Yen exchange rate.
None of the above.
3. As the treasurer of Sauron Corporation you wish to purchase sterling for dollars for delivery in 90 days. The following information is available to you.
As the treasurer of XYZ Corp. - which rate do you expect to achieve?
1.5209
1.5216
1.5265
1.5287
1.5291
A Corporate Customer asks for a quote to sell CHF and buy GBP for Spot value. You have the following rates:
GBP/USD 1.5850/60 USD/CHF 1.4120/30
At which rate can the Customer sell CHF against GBP?
2.2380
2.2390
2.2400
2.2410
2.2420
You enter into a front payment FRA locking the 3-month borrowing rate on July 15, at 7.00%. The nominal amount is $100 million. How much would you actually be paid by the counterparty if the 3-month rate on July 15, is actually 8.50%.
$326,100
$356,184
$362,598
$375,184
$377,280
8. A US company wishes to convert Swiss Francs into Sterling. It gets the following direct dollar/currency quotes from the market.
GBP/USD 1.5850/60 USD/CHF 1.4120/30
At what rate can the company expect to sell Francs and buy Sterling.
2.238
2.239
2.240
2.241
2.242
9. As the treasurer of Turtles Corporation you wish to purchase sterling for dollars for delivery in 90 days. The following information is available to you.
What forward rate do you expect to be able to achieve
$1.5209
$1.5216
$1.5265
$1.5287
$1.5291
The current GBP/USD spot exchange rate is 1.9000/9010. The 3-month sterling interest rate is 10 - 10 1/8% and the 3-month dollar interest rate is 4 - 4 1/8%. What is the equilibrium 3-month forward GBP/USD offer rate? The current date is August 19.