A bank is quoting the following exchange rates against the dollar for the Swiss franc and the Australian dollar: SFr/$ 1.4970 - 80 A$/$ 1.6237 - 47 An Australian firm asks the bank for an SFr/A$ quote. What cross-rate would the bank quote? (Round your answers to 4 decimal places.) Cross-rate Bid Price Ask Price

A bank is quoting the following exchange rates against the dollar for the Swiss franc and the Australian dollar: SFr/$ 1.4970 - 80 A$/$ 1.6237 - 47 An Australian firm asks the bank for an SFr/A$ quote. What cross-rate would the bank quote? (Round your answers to 4 decimal places.) Cross-rate Bid Price Ask Price

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Suppose the Japanese yen exchange rate is ¥116/$ and the British pond exchange rate is $1.27/£. a) What is the yen to pound cross-rate? b) Suppose that a bank gives you a quote of ¥156/£. Is there an arbitrage opportunity here? If so, explain how to take advantage of the mispricing.
1. Assume the following exchange rates for the New Zealand dollar in terms of the US dollar: North Bank: Bid price = $.401 Ask price = S.404 South Bank: Bid price = $.398 Ask price = S.400 a. Explain the steps involved in locational arbitrage using $1 million. b. What would be your profit?
Give typing answer with explanation and conclusion Currency Exchange Question: (Currency Per USD) If Mexican Peso Rate (MXN)=17.996867 If Singapore Dollar Rate (SGD)=1.33511 A Mexican investor wishes to buy 10 SGD bonds - each selling for SGD135,422. How much will the investor need in MXN to buy these?
A bank in London, Ontario charges 1.75% commission to buy and sell currencies. Assume that the current exchange rate is US$1 = C$1.3973. a. How many Canadian dollars will you receive from the bank if you sell US$1,310? Round to the nearest cent b. How much commission will you pay the bank for this transaction?
Spot Exchange Rate is GBP 1.83155 = 1 OMR (For Immediate Delivery). Instead of buying GBP immediately you can enter into a contract with the bank to deliver the currency after 6 months. The bank has quoted 6 months forward rate as GBP1.83355 = 1 OMR. (Home Currency is OMR, which is given as Indirect quotes).
Assume that you are a retail customer. Use the information below to answer the following question. Exchange Rate - Bid Exchange Rate - Ask Interest Rate APR S0($/€) $ 1.42 = € 1.00 $ 1.45 = € 1.00 i$ 4 % F360($/€) $ 1.48 = € 1.00 $ 1.50 = € 1.00 i€ 3 % If you had borrowed $1,000,000, traded them for euros at the spot rate, and invested those euros in Europe, how many euros do you receive in one year?
Bid-ask prices. A currency trader at UBS in New York City quotes to a customer the dollar-Swissie as CHF 1.1975-85 = US$1. What is the bid price for the U.S. dollar? What is the bid price for the Swiss franc? At what price is UBS willing to sell Swiss francs to its customer? What is the percentage spread of the bid-ask quote?
Assume the bid rate of an Yen dollar is $ 1.8 while the ask rate is $ 3.5 at Arab Bank.Assume the bid rate of an Yen dollar is $3.4 while the ask rate is $5.7 at Palestine Bank. Given this information, what would be your gain if you use $8876.7 and execute locational arbitrage? =8876.713.5^ * 3.4b =8876.7/5.7^ * 3.5c =8876.7/3.4^ * 1.8d = 8876.7 /3.5^ * 5.7
The following rates are available to you. (You may either buy or sell at these rates). Assume you have a $1,000,000 to trade. Quote for Japanese Yen US $ quote for British Pound Yen quote for British Pound Given this information, is triangular currency arbitrage possible? BOA Barclays Bank Daiwa Bank A. Yes, start by selling US dollars at Barclays Bank OB. Yes, start by selling British pounds at Daiwa Bank No, triangular currency arbitrage is not possible. O D. Yes, start by selling US dollars at BOA O C. US$ 0.009472/ US$ 1.3670/£ 142.45/£
Suppose quotes for the dollar–euro exchange rate E$/€ are as follows: in New York $1.05 per euro, and in Tokyo $1.15 per euro. Describe how investors use arbitrage to take advantage of the difference in exchange rates. Explain how this process will affect the dollar price of the euro in New York and Tokyo.
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