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# A. SHORT ANSWER (10 marks each). Write down your answer with all accompanying calculations. Assume that you are a retail customer. Use the information in the table below to answer the next 4...

A.
Assume that you are a retail customer. Use the information in the table below to answer the next 4 questions.

Bid

Bid
S0(\$/â‚¬)

\$1.40 = â‚¬1.00

\$1.43 = â‚¬1.00

i\$

4.10% APR
4.20% APR
F360(\$/â‚¬)

\$1.44 = â‚¬1.00

\$1.49 = â‚¬1.00

iâ‚¬

3.50% APR
3.65% APR
41) If you bo
owed \$1,000,000 for one year, how much money would you owe at maturity?
42) If you had â‚¬1,000,000 and traded it for USD at the spot rate, how many USD would you get?
43) If you had â‚¬1,000,000 and took a position in USD in the forward market, how many USD would you get one year from now?
44) If you had â‚¬1,000,000 and lent for one year in the US market, how many USD would you get one year from now?
Answered Same Day Apr 13, 2020

## Solution

Brijesh answered on Apr 15 2020
A.
Assume that you are a retail customer. Use the information in the table below to answer the next 4 questions.

Bid

Bid
S0(\$/â‚¬)

\$1.40 = â‚¬1.00

\$1.43 = â‚¬1.00

i\$

4.10% APR
4.20% APR
F360(\$/â‚¬)

\$1.44 = â‚¬1.00

\$1.49 = â‚¬1.00

iâ‚¬

3.50% APR
3.65% APR
41) If you bo
owed \$1,000,000 for one year, how much money would you owe at maturity?
When you bo