--%>

Forward cross-rates in German terms

Compute 30-, 90-, and 180-day forward cross exchange rates between German mark and Swiss franc by utilizing the most recent quotations.  Specify forward cross-rates in “German” terms.

E

Expert

Verified

The formulas which is used are:

FN(DM/SF) = FN($/SF)/FN($/DM)

or

FN(DM/SF) = FN(SF/$)/FN(DM/$).

The top formula which uses the American term forward exchange rates are:

F30(DM/SF)   = .6408/.5246 = 1.2215 

F90(DM/SF)   = .6453/.5270 = 1.2245

F180(DM/SF)  = .6518/.5307 = 1.2282

   Related Questions in Financial Accounting

  • Q : Incremental cash flows of capital

    Describe what you mean by the incremental cash flows of a capital project.

  • Q : Payment method-Buy pound or investing

    When you have visited the London, you have purchased a Jaguar for £35,000, which is payable within the three months. Enough cash is there at your bank in the New York City that pays 0.35% of interest per month, compounding monthly, to pay for car. Presently, spo

  • Q : Foreign subsidiary conforming norm of

    Specify some conditions under which you would suggest that foreign subsidiary conforms to local norm of the financial structure?

  • Q : Re-measurement and translation

    Explain the re-measurement and translation procedure in FASB 52 of translating to the reporting currency the books of the entirely owned affiliate which maintains its books in local currency of country in which it operates, that is different from its functional curren

  • Q : Drawback of Electronic Funds Transfer

    What are the drawback of Electronic Funds Transfer?

  • Q : Evaluated Receipt Settlement What do

    What do you mean by Evaluated Receipt Settlement?

  • Q : Creativity and the Individual What are

    What are the various aspects of Creativity on an individual in the creative industry ?    

  • Q : Effect of shipping costs Assume that

    Assume that pound is being pegged to the gold at 6 pounds per ounce; on the other hand the franc is being pegged to the gold at 12 francs per ounce. Which, of course, states that equilibrium exchange rate must be the two francs per pound? If existing market exchange r

  • Q : Calculate the bad debt expense for the

    The Webster Company uses the aging method to estimate the allowance for doubtful accounts. The following schedule of accounts receivable was prepared as at December 31, 20x6: Age Balance %

  • Q : Explain international Fisher effect

    Explain and also derive international Fisher effect.