NAME: KASSWINA A/P SHANMUGA NATHAN

MATRIC NUMBER: 261409

BWBB3073 FERT II
1. Bank buys USD/SGD fixed 1 month, Buy at 100 with 10% rate, USD 100 at price 110
SGD

2. i. Fixed Date Forward FX Contract

ii. Optional Date Forward FX Contract
iii. Multiple Optional Date Forward Contract
iv. Undeliverable Forwards

3. i. Buy (BID) the commodity currency, means GBP 1.0 at a price of USD 1.4850.
ii. Sell (OFFER) the commodity currency, means GBP 1.0 at a price of USD 1.4860.
iii. I would sell the USD at 1.4860 to Maybank KL because we usually use offer rate.

4. Here GBP is the commodity currency while MYR is the reference currency. So the bank
willing to buy GBP at MYR 5.1560 while sell the GBP at MYR 5.1610.

5. The value of AUD 125 is 0.0125. For MYR, the value is 0.0035.

9. i. a) Use the MYR received from importer to buy USD. Bank can buy USD from market
selling rate 3.2010. By doing this the bank has a long USD and short MYR position.
b) Sell the USD so acquired to obtain SGD, in the USD/SGD quotation; bank can sell USD at
1.6280. This transaction creates long SGD and short USD.
Netting the position in a) and b) gives the bank Long SGD and Short MYR. This will be
normalized by selling the THB to importer and get paid by importer in MYR.
ii. MYR = SGD
SGD 1.6280 = USD 1.0
USD 1.0 = MYR 3.1990
USD = (1×1×3.1990) / (1.6280×1×1)
= MYR 1.9650
iii. a) Use the SGD received from importer to buy USD, Bank can buy USD from market
selling rate 1.6280. By doing this the bank has a long USD and short SGD position.
b) Sell the USD so acquired to obtain MYR, in the USD/MYR quotation; bank can sell USD
at 3.1990. This transaction creates Long MYR and Short USD.
Netting the position in a) and b) gives the bank Long MYR and Short SGD. This will be
normalized by selling the THB to importer and get paid by importer in MYR.
iv. USD 1.0 = MYR 3.1990
USD 1.0 = SGD 1.6280
SGD 1.6280 = MYR 3.1990
SGD 1.0 = MYR (3.1990 / 1.6280)
= MYR 1.9650

10. i. Bank buys from customers who have received TTs from overseas or for exporters who
receive documentary credits allowing reimbursement by TTs.
ii. Bank buys from clients who receives checks or drafts from overseas or exporters who
receive documentary credits calling for reimbursements at sight or travellers presenting
travellers’ checks.
iii. a) AUD1800 × 2.9560 = MYR 5320.80
b) Buying OD Rate = 3.1450 – [(3.1170×4.0×14)/ (360 × 100)]
= 3.1401
c) AUD 1800 × 3.0480 = MYR 5486.40

11. D
12. A
13. C
14. C
15. A
16. C
17. C
18. A
19. A
20. B
21. D
22. A
23. B
24. D
25. B
26. A
27. C
28. A
29. B
30. C