Problem:
Shown below are exchange rates for several currencies in relation to the U.S. dollar.
Euro Swiss Franc Mexican Peso
Spot rate 0.90 1.70 11.00
30-day forward rate 0.92 1.80 10.95
60-day forward rate 0.93 1.85 10.70
a. Is the euro appreciating or depreciating against the U.S. dollar? Why?
b. Is the Swiss franc appreciating or depreciating against the U.S. dollar? Why?
c. Is the Mexican peso appreciating or depreciating against the U.S. dollar? Why?
d. Using cross-rates, how many francs will the euro buy, how many pesos will the franc buy, and how many euro will the peso buy?