1. Marvin Coronel, MSc, FRM is a treasury trader at Citibank Philippines. Apart from managing the balance sheet of the b
Posted: Wed May 18, 2022 10:47 pm
1. Marvin Coronel, MSc, FRM is a treasury trader at Citibank
Philippines. Apart from managing the balance sheet of the bank, he
is also tasked to generate profit from Trading activities including
FX instruments. Suppose the current 1-yr USDPHP forward is 47.50.
If he believes that the broad USD will continue to appreciate
strongly until next year, which of the following deal should he
do?
a. Marvin should not do the FX forward at all and just buy USD
at the spot rate a year from now.
b. Marvin should do a 1-yr FX forward deal where he buys USD at
the spot rate in one year.
c. Marvin should do a 1-yr FX forward deal where he buys USDPHP
at the forward price.
d. Marvin should do a 1-yr FX forward deal where he buys USD at
the forward price.
2. Marvin Coronel, MSc, FRM is a treasury trader at Citibank
Philippines. Apart from managing the balance sheet of the bank, he
is also tasked to generate profit from trading activities including
FX instruments. Suppose the current 1-yr USDPHP forward is 47.50.
If he believes that the peso will continue to perform strongly
against the dollar until next year, which of the following deal
should he do?
a. Marvin should not do the FX forward at all and just buy USD
at the spot rate from now.
b. Marvin should choose an FX option as it gives him some level
of flexibility.
c. Marvin should do a 1-yr FX forward deal where he buys USD
47.50 in one year.
d. Marvin should do a 1-yr FX forward deal where he buys USD at
the rate in one year.
3. Citibank is selling a 1-year FX PUT option on USD to a
multinational corporation (MNC) at a premium amounting to X at
strike/exercise price of Y. Which of the following will most likely
happen?
a. Citibank has the right to sell USD currency at Y at the end
of six months.
b. MNC has the right to sell USD currency at Y at the end of six
months.
c. Citibank has the potential obligation to sell USD currency at
Y at the end of six months.
d. MNC has the potential obligation to sell USD currency at Y at
the end of six months.
4. Citibank is selling a 1-year FX PUT option on USD to a
multinational corporation (MNC) at a premium amounting to X at
strike/exercise of Y. Which of the following will most likely to
happen?
a. Citibank has the right to buy USD currency at Y at the end of
six months
b. Citibank has the potential obligation to sell USD to MNC to Y
at the end of six months
c. Citibank has the potential obligation to buy USD from MNC to
Y at the end of six months
d. Citibank has the potential obligation to sell USD to MNC at X
+ Y at the end of six months
Philippines. Apart from managing the balance sheet of the bank, he
is also tasked to generate profit from Trading activities including
FX instruments. Suppose the current 1-yr USDPHP forward is 47.50.
If he believes that the broad USD will continue to appreciate
strongly until next year, which of the following deal should he
do?
a. Marvin should not do the FX forward at all and just buy USD
at the spot rate a year from now.
b. Marvin should do a 1-yr FX forward deal where he buys USD at
the spot rate in one year.
c. Marvin should do a 1-yr FX forward deal where he buys USDPHP
at the forward price.
d. Marvin should do a 1-yr FX forward deal where he buys USD at
the forward price.
2. Marvin Coronel, MSc, FRM is a treasury trader at Citibank
Philippines. Apart from managing the balance sheet of the bank, he
is also tasked to generate profit from trading activities including
FX instruments. Suppose the current 1-yr USDPHP forward is 47.50.
If he believes that the peso will continue to perform strongly
against the dollar until next year, which of the following deal
should he do?
a. Marvin should not do the FX forward at all and just buy USD
at the spot rate from now.
b. Marvin should choose an FX option as it gives him some level
of flexibility.
c. Marvin should do a 1-yr FX forward deal where he buys USD
47.50 in one year.
d. Marvin should do a 1-yr FX forward deal where he buys USD at
the rate in one year.
3. Citibank is selling a 1-year FX PUT option on USD to a
multinational corporation (MNC) at a premium amounting to X at
strike/exercise price of Y. Which of the following will most likely
happen?
a. Citibank has the right to sell USD currency at Y at the end
of six months.
b. MNC has the right to sell USD currency at Y at the end of six
months.
c. Citibank has the potential obligation to sell USD currency at
Y at the end of six months.
d. MNC has the potential obligation to sell USD currency at Y at
the end of six months.
4. Citibank is selling a 1-year FX PUT option on USD to a
multinational corporation (MNC) at a premium amounting to X at
strike/exercise of Y. Which of the following will most likely to
happen?
a. Citibank has the right to buy USD currency at Y at the end of
six months
b. Citibank has the potential obligation to sell USD to MNC to Y
at the end of six months
c. Citibank has the potential obligation to buy USD from MNC to
Y at the end of six months
d. Citibank has the potential obligation to sell USD to MNC at X
+ Y at the end of six months