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  • TFM-Practice Question-Forex-forward

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    ONASHI DEVNANI BBA
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    The document is a practice question from a Treasury and Funds Management course at Mohammad Ali Jinnah University. It asks the student to calculate the 3-month forward exchange rate for USD to PKR for a client expecting to receive $5 million in 3 months. Given the spot rate of 140.50 USD/PKR, 3-month KIBOR of 3.10%, 3-month LIBOR of 2.35%, and a premium of 300 basis points added to KIBOR and LIBOR, the student is asked to find the forward rate and its premium over the spot rate.

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    The document is a practice question from a Treasury and Funds Management course at Mohammad Ali Jinnah University. It asks the student to calculate the 3-month forward exchange rate for USD to PKR for a client expecting to receive $5 million in 3 months. Given the spot rate of 140.50 USD/PKR, 3-month KIBOR of 3.10%, 3-month LIBOR of 2.35%, and a premium of 300 basis points added to KIBOR and LIBOR, the student is asked to find the forward rate and its premium over the spot rate.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    22 views1 page

    TFM-Practice Question-Forex-forward

    Uploaded by

    ONASHI DEVNANI BBA
    The document is a practice question from a Treasury and Funds Management course at Mohammad Ali Jinnah University. It asks the student to calculate the 3-month forward exchange rate for USD to PKR for a client expecting to receive $5 million in 3 months. Given the spot rate of 140.50 USD/PKR, 3-month KIBOR of 3.10%, 3-month LIBOR of 2.35%, and a premium of 300 basis points added to KIBOR and LIBOR, the student is asked to find the forward rate and its premium over the spot rate.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    Mohammad Ali Jinnah University

    Treasury and Funds Management (FN3540)


    Practice Question-Forex-Forward
    FALL 2020 (AM)
    Instructor Name: Dr. S. M. Noaman Ahmed Shah
    Date: 05-01-2021

    Question:

    Assume Mr. Zero is your client and he expected to receive USD 5 million after 3 months. As his banker,

    you have to quote him a forward rate for 3 months. The USD/PKR spot rate is 140.50. Three months (91

    days) KIBOR is 3.10% p.a. whereas LIBOR (USD) is 2.35% p.a. Assuming a premium of 300 bps in

    addition to KIBOR and LIBOR, find the forward rate and its premium in basis points.

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