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  3. in $ per $ peso 0.0687 14.5560 1 month forward 0.

in $ per $ Peso 0.0687 14.5560 1 month forward 0.0500 20.0000 3 month...

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Question

Finance

in $ per $

Peso 0.0687 14.5560

1 month forward 0.0500 20.0000

3 month forward 0.0690 14.4928

6 month forward 0.0556 17.9856

1. Using the same information given in #1, calculate the 1-month forward premium for peso in American terms. The 1- month contract is a 31-day contract.

2. Lets say, the forward rate between the Peso and $ is F6m($/peso) = 0.0556. If you believe that the peso will depreciate against the $ beyond this 6-month forward rate of $0.0556/peso over the next 6 months, should you take a long or a short position in the peso forward contract?

Do both questions and iwill rate you up

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