The treasurer of american airlines

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The treasurer of American Airlines ca lls Citibank and asks for a quote on British pounds (GBPs) (to be used in conjunction with a three - month dollar - denominated bridge loan for terminal expansion at Heathrow). (Note: the base currency is listed first and the quote currency second) GBP/USD sp ot rate quote: 1.3340 - 1.3344 GBP/USD 3 - month swap points: 130 - 120 a. The AA treasurer wants to buy spot and sell 3 months forward 1 million GBP (a spot - against - forward FX swap). At what rate of exchange in USD per GBP would the spot transaction ta ke place? Show your answer to four decimal places. ___________ b. At what rate of exchange in USD per GBP would the forward transaction take place? Show your answer to four decimal places. ___________ c. Now suppose the corporate treasurer only wants to se ll 3 months forward 1 million GBP (an outright forward). At what rate of exchange in USD per GBP would the forward transaction take place? Show your answer to four decimal places. 

Reference no: EM13837626

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