Explore BrainMass

Explore BrainMass

    Swap rate and forward premuim

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    4. An investor wishes to buy euros spot (at $0.9080) and
    sell euros forward for 180 days (at $0.9146).
    a. What is the swap rate on euros?
    b. What is the forward premium or discount on 180-
    day euros?

    © BrainMass Inc. brainmass.com October 9, 2019, 6:28 pm ad1c9bdddf

    Solution Preview

    a. The swap rate is the difference between the forward rate and the spot rate.
    Swap rate = ...

    Solution Summary

    The solution explains the calculation of swap rate and forward premium.