Question:
On Wednesday, how much was the 180-day forward franc selling at? Explain.
Comparing the franc's forward rates against the franc's spot rate, what is the exchange market's consensus on the franc's spot rate against the dollar over the period of a forward contract? In other words, will the franc's spot rate appreciate or depreciate against the dollar? Explain.
Table: Forward Exchange rates
U.S. Dollar Equivalent
Wednesday Tuesday
Switzerland (Franc) .6598 .6590
30-day Forward .6592 .6585
90-day Forward .6585 .6578
180-day forward .6577 .6572