UNISA
MAC3702 - APPLICATION OF FINANCIAL
MANAGEMENT TECHNIQUES
ASSIGNMENT 1
2022
SEMESTER 1
, 1. What was the mid-rate on 31 January 2022?
Mid-rate = (Buying rate + Selling rate)/2
= (2,2891 + 2,2433)/2
= 2,2662
2. What is the 90-day forward rate that would have been quoted on 12 November
2021?
Forward rate = Spot rate * [( 1 + interest rate in domestic country) / (1 + foreign interest
rate)]
The bank is selling the foreign currency, therefore Spot rate = Selling rate on 12
November 2021 = 2,0664
90-day FWD rate = 2,0664 *{[1 + (0.07 * 90/365)] / [1 + (0.0435 * 90/365)]}
MAC3702 - APPLICATION OF FINANCIAL
MANAGEMENT TECHNIQUES
ASSIGNMENT 1
2022
SEMESTER 1
, 1. What was the mid-rate on 31 January 2022?
Mid-rate = (Buying rate + Selling rate)/2
= (2,2891 + 2,2433)/2
= 2,2662
2. What is the 90-day forward rate that would have been quoted on 12 November
2021?
Forward rate = Spot rate * [( 1 + interest rate in domestic country) / (1 + foreign interest
rate)]
The bank is selling the foreign currency, therefore Spot rate = Selling rate on 12
November 2021 = 2,0664
90-day FWD rate = 2,0664 *{[1 + (0.07 * 90/365)] / [1 + (0.0435 * 90/365)]}
