EXERCISES FOREX MARKET

1. A bank quotes you the following pairs of foreign exchange quotation today:

Spot rates RM3.2525/50/US$ RM2.3225/60/S$

1-month forward points 90/101 45/32

i) Calculate spot S$/US$ cross bid and ask rates.

ii) Calculate 1-month forward S$/US$ cross bid and ask rates.

iii) What is bid-ask percentage of S$/US$ for 1 month delivery?

2. Mel Broke Sdn Bhd has to buy and sell currencies at different time periods. Loan Bank
provides the following quote on the foreign currency.

RM/US$ 3.4872/84 30/45 61/55

RM/ 6.3145/65 65/80 23/19

i) How many RM would you pay to buy US$6,600,000 today?

ii) How many pound sterling would you receive if you have RM820,000 today?

ii) How many US dollars can you purchase for delivery in 1 month with RM2,300,000?

iii) How many ringgit would you receive if you sell 74,000 for delivery in three months?

iv) What is the bid-offer price of US dollar per today?

3. You are given the following information:

Spot rates : RM2.4515/45/S$

1-month S$ interest rate: 5%

1-month RM interest rate: 3.0%

i) Which currency is at a premium?

ii) Calculate the 1-month forward RM/S$ bid and ask swap points.

iii) Determine the 1-month outright forward RM/S$ bid and ask rates