International Finance Take
Autor: Muhamad Aswad Mohd Noor • March 13, 2019 • Term Paper • 925 Words (4 Pages) • 495 Views
OOI XIU HUI 824785
International Finance Take Home Mid Term Test
Question 1
Cross Rate Calculations
Bank A Bank B
1 USD=106.00 Yen 1 AUD=83.00 Yen
1 USD=3.9000 MYR 1 AUD= 3.0700 MYR
1 EURO=1.2400 USD
1 AUD=0.7850 USD
Therefore, 1 AUD=106 x0.7850 Yen
=83.21 Yen
Bank A > Bank B
Therefore, 1 AUD = 3.9 X 0.785
= 3.0615
Bank A < Bank B
To make profit from Bank B , buy low, sell high.
- 1 AUD +83.21 Yen (Bank A) +1 AUD -3.0615 MYR
+1 AUD - 83.00 Yen (Bank B) -1 AUD +3.0700 MYR
0 AUD + 0.21 Yen + 0.0085 MYR
Bank C
1 EURO=4.87805 MYR
1 MYR=0.2050 EURO
From Bank A
1 EURO = 3.9 X 1.24 MYR
= 4.8360
Bank C > Bank A
To profit,
-1 EURO + 4.87805
+1 EURO -4.8360
+ 0.04205
Question 2
[pic 1][pic 2][pic 3]
Spot 1.2400[pic 4][pic 5][pic 6]
[pic 7]
1.5% 2.0%
92/365 92/360
[pic 8][pic 9]
[pic 10][pic 11]
Forward[pic 12]
1.241643
Forward Rate= 1.241643
Forward Margin= 1.241643-1.2400
=0.001643
1 EURO is at a premium in forward market.
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