An investor is given the following quotes from a bank:BidS$ / US$S$ / €Offer0.7430 (i.e. S$1 = 74 US cents approximately)0.74100.5030 0.5050 (i.e. S$1 = 0.5 euro approximately)Suppose the investor has 1,000 Euros and wants to change them into US dollars.Analyse how the investor could determine the amount of US dollars the bank willgive him. Answer to three (3) decimal places. Suppose it is reported in the news that the US govemment would make a majorannouncement in one week's time regarding the imposition of new tariffs ongoods exported from Europe. Briefly discuss one (1) reason each why:(i)(ii)The Euro weakensThe bid-ask spread of EUR/USD widensIt is observed that the bid-ask spread of a currency pair is wider at a bank'scurrency exchange counter at the airport compared to the spread at the bank'sdowntown branch counter. List and briefly discuss one (1) reason.

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An investor is given the following quotes from a bank: S$ / USS S$ /€ Bid 0.7410 Offer 0.7430 (i.e. S$1 = 74 US cents approximately) 0.5050 (i.e. S$1 = 0.5 euro approximately) 0.5030 Suppose the investor has 1,000 Euros and wants to change them into US dollar Analyse how the investor could determine the amount of US dollars the bank wi give him, Answer to three (3) decimal places.

An investor is given the following quotes from a bank: S$ / USS S$ /€ Bid 0.7410 Offer 0.7430 (i.e. S$1 = 74 US cents approximately) 0.5050 (i.e. S$1 = 0.5 euro approximately) 0.5030 Suppose the investor has 1,000 Euros and wants to change them into US dollar Analyse how the investor could determine the amount of US dollars the bank wi give him, Answer to three (3) decimal places.

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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Use the following table to answer the question about the money supply given the following hypothetical data for an economy. Item Billions of Dollars $2,000 350 80 Checkable Deposits Small Time Deposits Currency Held By The Public Savings Deposits, Including Money-Market Deposit Accounts Money-Market Mutual Funds Held By Individuals Money-Market Mutual Funds Held By Businesses 1,300 600 700 Refer to the table above. The size of the M1 money supply is: Select one: O a. $1,940 O b. S2,730 O c. None of the above O d. S2,220 O e. $2,080 Activate Windows Go to Settings to activate
Assume the bid rate of a Canada dollar is A$.271 while the ask rate is A$.273 at Bank A. Assume the bid rate of the Canada dollar is A$.265 while the ask rate is A$.266 at Bank B. Given this information, what would be your gain if you use A$2,500,000 and execute locational arbitrage? That is, how much will you end up with over and above the A$2,500,000 you started with? Group of answer choices A$ 46,992 A$ 65,789 - A$ 65,789 A$ 18,315 - A$ 46,992
5. Suppose that you have local currency equivalents of the following accounts: Savings account $10,000 • Current Account $10,000 • CD (one year maturity) $15,000 • CD (five year maturity) $17,500 plus the following foreign currency accounts: • $10,000 • £10,000 Suppose the bank fails. How much can you expect to recover/to lose from deposit insurance given deposit insurance in the jurisdictions in which you have been assigned? What percent did you, as the depositor, actually recovery of the total sums that were deposited at the failed bank (with all foreign currency accounts converted into the relevant local currency)?
Mrs Ireen Ndhlovu kaleji has US$ 2,000 which she is planning to exchange with Zambian Kwacha. She inquires from the bank and is given the following information: Ask price Bid price 1 USD K10 K9.5 1 ZWM K0.806 K0.79 The other information showed the following: Ask price Bid price 1 ZMW US$ 0.10 US$ 0.105 1 ZMW ZAR 1.241 ZAR 1.268 a) Explain to Mrs. Kaleji the differences of the quotations given above and the differences between BID and ASK prices in exchange rate b) How much Zambian kwacha is Mrs Kaleji expecting to be given by the bank if she sells US$ 2,000 and How much…
Suppose the quotes for currencies in the three money centers are given as follows: At London center: 1GBP = 150 JPY At Tokyo center: 1USD = 115 JPY At New York center: 1USD = 0.86GBP An investor has 100,000 USD. Is there any opportunity for arbitrage? If yes, explain how does the investor use arbitrage to take advantage of these data? And how much could he or she earn from this?
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company will receive €75 million in 1 year from an Italian customer. observe the following data. $:€ Spot Rate $1.25:€1.00 $:€ Forward Rate $1.30:€1.00 How many USD will you receive if you employ a forward hedge
A bank enters a reverse repurchase agreement in which it agrrrd to buh T bills from one of its correspondent banks at a price of $10000 with the promise to sell these funds bank at a price of $ 10000, 291.67 ( $10 000 000 plus interest of $ 291.67) after five days. What will be the yield on this transaction
You are a treasure analyst for your bank. One of your large corporate customers is interested in a currency hedge and approached your bank for quotes on forward rates. Using the following data, answer the questions below: Spot USD / JPY 116.00 3 Months DOLLAR Deposit Rate 4.50% p.a. 6 Months DOLLAR Deposit Rate 5.00% p.a. 3 Months YEN Deposit Rate 0.25% p.a. 6 Months YEN Deposit Rate 0.52% p.a. FRA Rate for Yen Nil A ) What would be 6 months USD/JPY Forward Rate? B) What should be 3 month interest rate 3 months Forward? C )The 6 and 12 month USD LIBORS are 5% and 6.5% respectively. A bank is quoting 6/12 USD FRA at 6.50 – 6.75%. What position should you take to make a profit for your bank? D) Your bank has a 3 month euro deposit of 10 million which was converted to $TT to support the $TT liquidity position. The bank is concerned about currency risk. Briefly explain the risk to the bank and how can this be hedged using futures and options. NEED ANSWERS AND CALCULATIONS PLEASE
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