Answered: Bid/Ask Spread Utah Bank’s bid price…

Bid/Ask Spread Utah Bank’s bid price for Canadian dollars is $.7938 and its ask price is $.8100. What is the bid/ask percentage spread?

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter3: International Financial Markets

Section: Chapter Questions

Problem 7QA

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The bid-ask rate for GBP/OMR in Britain stock exchange GBP is quoted as GBP1.6675-802/OMR. What will the spread for OMR/GBP? a. All the options are wrong b. -0.756 c. 0.756 d. 1.93 e. 0.762 The quote for CAD in Canada is 3.40082 - 52112 = 1 OMR. What will be the ask rate for OMR/CAD? a. 0.284001 b. 0.294047 c. 0.1203 d. 3.52112 e. All the options are wrong
You are provided with the following quotes: AUD/S 1.4873 - 79 Yen/$ 111.4771 - 77 Calculate the $/AUD bid and ask rates. Show your answer in the space below. For example: S/AUD bid rate = ... S/AUD ask rate = .......... .......
If bank X is quoting “A $1.5838/ bid and A $1.1682/€ ask” and bank Y is quoting “A $1.1684/€ bid and A $1.1690/€ ask”. If you buy € 2million from X at it’s A $1.1682/€ ask price and simultaneously sell € 2million to Y at it’s A $ 1.1684/€ bid price. Calculate arbitrage profit.
Suppose that you have the following utility function: U=E(r) – ½ Aσ2 and A=3 Suppose that you have $10 million to invest for one year and you want to invest that money into ETFs tracking the S&P 500 (US) and S&P/TSX 60 (Canada) index, which are often used as proxies for the US and Canadian stock markets, respectively, and the Canadian one-year T-bill. Assume that the interest rate of the one-year T-bill is 0.35% per annum. You have found two ETFs that you are interested in. From a set of their historical data between 2001 and 2019, you have estimated the annual expected returns, standard deviations, and covariance as follows: ETFUS : E(r)= 0.070584 0.173687 ETFCDA : E(r)= 0.073763 0.16816 Covariance between ETFUS and ETFCDA = 0.02397 Answer the following questions using Excel: What is the optimal portfolio of ETFUS and ETFCDA? Also submit an Excel file to show your work.
Suppose that you have the following utility function: U=E(r) – ½ Aσ2 and A=3 Suppose that you have $10 million to invest for one year and you want to invest that money into ETFs tracking the S&P 500 (US) and S&P/TSX 60 (Canada) index, which are often used as proxies for the US and Canadian stock markets, respectively, and the Canadian one-year T-bill. Assume that the interest rate of the one-year T-bill is 0.35% per annum. You have found two ETFs that you are interested in. From a set of their historical data between 2001 and 2019, you have estimated the annual expected returns, standard deviations, and covariance as follows: ETFUS : E(r)= 0.070584 0.173687 ETFCDA : E(r)= 0.073763 0.16816 Covariance between ETFUS and ETFCDA = 0.02397 Answer the following questions using Excel: Draw the opportunity set offered by these two securities (with increments of 0.01 in weight). Hint: In Excel, calculate the portfolio expected return and…
Suppose that you have the following utility function: U=E(r) – ½ Aσ2 and A=3 Suppose that you have $10 million to invest for one year and you want to invest that money into ETFs tracking the S&P 500 (US) and S&P/TSX 60 (Canada) index, which are often used as proxies for the US and Canadian stock markets, respectively, and the Canadian one-year T-bill. Assume that the interest rate of the one-year T-bill is 0.35% per annum. You have found two ETFs that you are interested in. From a set of their historical data between 2001 and 2019, you have estimated the annual expected returns, standard deviations, and covariance as follows: ETFUS : E(r)= 0.070584 0.173687 ETFCDA : E(r)= 0.073763 0.16816 Covariance between ETFUS and ETFCDA = 0.02397 Answer the following questions using Excel: Determine your optimal asset allocation among ETFUS , ETFCDA , and T-bill, in percentage and in dollar amounts. Also submit an Excel file to show your…
You have the following financial market information. You also have 1.88 million Australian dollar (A$) or 3.14 million Thai baht (THB) to make a profit due to covered interest arbitrage (CIA). Calculate the profit in A$ or THB if the CIA opportunity exists in the market. (enter the whole number without sign and symbol) Bid price Ask price A$0.0464 A$0.0682 THB spot rate THB one-year forward rate A$0.0425 A$0.0634 A$ spot rate THB22.4037 THB24.2606 A$ one-year forward rate THB27.6528 THB29.6897 Deposit rate Loan rate Interest rate on A$ 2.70% 4.58% Interest rate on THB 6.98% 8.23%
Assume the following information: Quoted Bid Price Quoted Ask Price Value of a Brazilian real (BRL) in $ $0.20 $0.21 Value of a Chilean peso (CLP) in $ $ .0010 $.0011 Value of a Brazilian real (BRL) in Chilean peso (CLP) CLP212.50 CLP212.75 Evan has $80,000 to conduct triangular arbitrage. What will be Evan's profit from implementing this strategy? Question 20 options: $567.29. $952.38. $631.24. $829.63.
Assume that a financial institution (FI) has purchased 3,500 shares of AB and 7,500shares of CD. The share’s AB current bid and offer are £48.5 and £50.1 respectivelywhile the share’s CD current bid and offer are £101.1 and £101.5 respectively. Supposefurther that the bid–offer spreads are normally distributed with a mean and a standarddeviation of 1% for AB and with a mean of 3% and a standard deviation of 4% for CD.a) Which of the two shares (AB and CD) has the higher cost in terms of execution?Explain b) Calculate the cost of liquidation in a normal market c) Calculate the cost of liquidation in a stressed market at a 95% confidence level.Using your answers to (b), what do you observe?II. Consider a European call option on a non-dividend-paying stock. The following tableshows the value (in £), the delta (Δ), the gamma (Γ) and the theta (Θ) for a longposition in one option: (see the image) a) Using the numbers in the table, if there is an increase of £0.5 in the stock price,explain…
The stock market data given by the following table. Telmex Mexico World Correlation Coefficients Telmex 1.00 Equity cost Mexico 0.90 1.00 World 0.60 0.75 1.00 % SD (%) 18 15 10 R (%) ? The above table provides the correlations among Telmex, a telephone/communication company located in Mexico, the Mexico stock market index, and the world market index, together with the standard deviations (SD) of returns and the expected returns (R). The risk-free rate is 6%. 14 12 Suppose now that Telmex has made its shares tradable internationally via crosslisting on the NYSE. Again using the CAPM paradigm, estimate Telmex's equity cost of capital. (Do not round intermediate calculations. Round your answer as a percent rounded to 2 decimal places.)
The preference share of Acme International is selling currently at $107.4. If your required rate of return is 8.7 per cent, what is the dividend paid by this share? Round your answer to 2 decimal places. E.g. if the final value is $12345.8342, please type 12345.83 in the answer box (do not type the dollar sign).
Data: S0 = 107; X = 110; 1+r = 1.12. The two possibilities for ST are 155 and 95. (Round to 2 decimal places). a. The range of S is 60 while that of P is 15 across the two states. What is the hedge ratio of the put? Hedge ratio ? b. Form a portfolio of one share of stock and four puts. What is the (nonrandom) payoff to this portfolio? Nonrandom payoff c. What is the present value of the portfolio? Present value d. Given that the stock is currently selling at 107, calculate the put value. Put value