1．ry Beth Morgan and Shaban Shoshi are currency traders for Mercury Forex Inc. They have compiled the following information concerning currencies in Sweden (SEK), New Zealand (NZD), and United States (USD).
| SEK/USD | USD/NZD | Spot bid rate | 7.8927 | $0.6994 | Spot ask rate | 7.9021 | $0.7000 | 3-month forward bid rate | 7.8780 | $0.7010 | 3-month forward ask rate | 7.8794 | $0.7020 |
As they are reviewing the information in the currency quotes, Morgan states, “the Swedish Krona is trading at a forward premium, however that premium is less than 1 percent.” Shoshi replies, I’ll have to double check that, but it looks like the NZD is weak relative to the USD.” With regard to their statements: A) Morgan’s statement is correct; Shoshi’s statement is correct. B) Morgan’s statement is incorrect; Shoshi’s statement is incorrect. C) Morgan’s statement is correct; Shoshi’s statement is incorrect. D) Morgan’s statement is incorrect; Shoshi’s statement is correct. The correct answer was C) Remember that the forward premium or discount is always on the currency in the denominator of the quote. Since bid/ask quotes are given, use the midpoints. The spot mid point = 7.8974 and the forward midpoint = 7.8787. Since Morgan’s statement is in terms of the Swedish Krona, we need to convert the currency quotes to USD/SEK. Spot midpoint = (1/7.8974) = $0.1266 Forward midpoint = (1/7.8787) = $0.1269 USD/SEK premium/discount = [($0.1269 – $0.1266)/$0.1266] [12/3] = 0.95% premium for the Swedish Krona. Morgan’s statement is correct. To evaluate Shoshi’s statement, first find the midpoints. Spot USD/NZD midpoint = $0.6997 Forward USD/NZD midpoint = $0.7015. USD/NZD premium/discount = [($0.7015 -$0.6997)/$0.6997] [12/3] = 1.03% premium. Since the NZD is trading at a forward premium, the NZD is strong relative to the USD. Shoshi’s statement is incorrect. 2．currency trader has compiled the following currency quotes:
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发表于 2008-5-12 14:35
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