The current spot rates are: GBP (S/E) EUR (S/E) JPY (¥/$) Bid 1.115 1.025 102 13,000,000.35 You owe a customer in England £1 and you are owed 86. You currently have $13 million in the bank. How much will you have in the bank after both transactions are finished? Ask 1.168 1055 127 13,324,862.7451 margin of error +/-10

The current spot rates are: GBP (S/E) EUR (S/E) JPY (¥/$) Bid 1.115 1.025 102 13,000,000.35 You owe a customer in England £1 and you are owed 86. You currently have $13 million in the bank. How much will you have in the bank after both transactions are finished? Ask 1.168 1055 127 13,324,862.7451 margin of error +/-10

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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Similar questions

If the interest rate in Oman is 10% and in China is 15%. Current spot exchange rate is CNY16.59/0MR and one-year forward rate is CNY16.57/OMR. If you have the option to borrow OMR 1,000 from bank Muscat for one year then, on the basis of covered interest arbitrage how much arbitrage profit you can make? OMR 51.3880 None of these OMR 1,051.3880 OMR 1,000
Use the information below to calculate the expected gain or loss on the carry trade strategy for an initial borrowed amount of 1,000,000 (you will have to determine the currency of borrowing). Keep at least two decimals in your calculations but round up or down at the end (enter the final answer without decimals). Current spot rate of Polish zloty (PLN/EUR) Expected future spot rate of of zloty (PLN/EUR) in three months Annualized three-month interest rate on Polish zloty (%) Annualized three-month interest rate on euros (%) 3,119,971 135,769 margin of error +/- 10 4.64 4.11 3.77 1.53
Tyson Inc. wants to hedge an account receivable of ¥595 million to be received in six months using a money market hedge. Given a yen borrowing rate of 6% APR and a spot exchange rate of ¥119/$ how much is the yen denominated loan Tyson Inc. will need to borrow today worth when converted into dollars? Question 6 options: $4,926,108 $4,716,981 $5,000,000 $4,854,369
unc.3 Your company can get yen loans for 2.0%. Dollar rates on the same loans are 4.5%. The spot yen per dollar exchange rate is 104. The forward rates for years 1 thru 4 are, 101.51, 99.08, 96.71, and 94.40, respectively. What is the present value of the market-maker's net cash flow if spot rates are 102 instead? A) $188.59 B) $206.43 C) $219.96 D) $242.06
Q1-14 Suppose the expected spot rate (after 1 year) for euros (in terms of dollars) is $1.50, the current interest rate on euro deposits is 4.5%, and the current interest rate on dollar deposits is 5.5%. What current spot rate would satisfy the uncovered interest parity (UIP) equation? a. $1.65 b. $1.50 c. $1.25 d. $1.485
Show the complete solution. (not the excel type)
In search of arbitrage profits in the forex market, you ring ANZ bank and Commonwealth bank. Both are Australia commercial bank. These two banks offer you the following quotes for the USD at the same time: MYR/USD 1.1650- 1.1670 UOB Bank HSBC Bank MYR/USD 1.1640- 1.1660 Illustrate your calculation start with RM1 million. Can you make an arbitrage profit with these quotes?
TB SA Qu. 06-69 If you had borrowed $1,000,000.... Use the information below to answer the following question. Exchange Rate $ 1.60 €1.00 $1.58 € 1.00 So ( $/ €) F360 ($/C) Interest Rate is ic APR 28 4% If you had borrowed $1,000,000, traded them for euro at the spot rate, and invested those euros in Europe, how many euros will you receive in one year?
Q1-17 Suppose that the 3-month interest rate in New York is 4% and the 3-month interest rate in London is 3%, and that the spot rate is $2.00/£ and the 3-month forward rate is $2.10/£. In this situation, there is an incentive for short-term interest arbitrage funds to flow: a. from New York to London. b. from London to New York. c. neither from New York to London nor from London to New York. d. from New York to London, from London to New York, or in neither direction; an answer cannot be determined without more information.
ABC Corp. borrows $5 million at 10% from a bank and swaps this loan for a 12% yen loan. The spot exchange rate is JPY105 = USD1. How much does ABC pay annually to the bank? Multiple Choice ¥1.26 million ¥5.71 million Wrong ¥52.50 million ¥63.00 million
Question 5: Assume that You are risk manager at BIC Investment. BIC fırm wants to fix currency rate for 5.000.000 USD export transaction in 120 days and 3.000.000 EURO import transaction in 180 days from AC Bank. Find bid and ask forward rate of AC Bank by using exchange rates and interest rates below. USD/TL: 13,3725/13,9850 USD interest rate: 0,50/1,00 TL interest rate: 21.00/27,00 EURO/TL: 15,2700/15,4250 EURO interest rate: 1,25/2,50
In New York, you can exchange $1 for €0.8355 or £0.6006. Suppose that, in Berlin, £1 costs €1.1722. How much profit can you earn on $28,394 using triangle arbitrage?

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