The following spot rates are observed in the foreign exchange market: Currency Units Required to Buy One US Dollar Britain (Pound) 0.62 Japan (Yen) 140.0 Europe (Euro ) 0.90 On the basis of this information, compute to the nearest second decimal the number of (a) British pounds that can be acquired for Us $ 100 (b) Euros that can be acquired for U.S $ 40 (c) U.S dollar that 200 Euros can buy (d) U.S dollars that 1,000 Japanese yen will buy

The following spot rates are observed in the foreign exchange market: Currency Units Required to Buy One US Dollar Britain (Pound) 0.62 Japan (Yen) 140.0 Europe (Euro ) 0.90 On the basis of this information, compute to the nearest second decimal the number of (a) British pounds that can be acquired for Us $ 100 (b) Euros that can be acquired for U.S $ 40 (c) U.S dollar that 200 Euros can buy (d) U.S dollars that 1,000 Japanese yen will buy

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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Using Exchange Rates Use the information below to answer the following questions. U.S. $ EQUIVALENT CURRENCY PER U.S. $ Polish Zloty .2985 3.3496 Euro 1.2318 .8118 Mexican Peso .0752 13.2980 Swiss Franc 1.0256 .9750 Chilean Peso .002071 482.80 New Zealand Dollar .8092 1.2358 Singapore Dollar .8015 1.2476 a. If you have $100, how many Polish zlotys can you get? (Do not include the Polish zlotys sign, zl. Round your answer to 2 decimal places, e.g., 32.16.) b. How much is one euro worth in U.S. dollars? (Round your answer to 4 decimal places, e.g., 32.1616.) c. If you have 5.00 million euros, how many dollars do you have? (Enter your answer in dollars, not millions of dollars, rounded to the nearest whole dollar, e.g., 1,234,567.) d. Which…
Suppose the exchange rate between U.S. dollars and British Pounds is $1.00 = 1.56 Pounds and the exchange rate between the U.S. dollar and the Euro is $1.00 = 1.15 Euros. What is the direct quote cross rate of one Pound to the euro? (How many Euros will one Pound purchase?) Instruction: Type your answer in euros, and round to two decimal places
Jane Cruise has U.S. dollars ($) amounting to $1,000,000, and is provided with the following quotes: Bank C: Euro/US dollar = €0.8529/$ Bank C: British pound /US dollar = £0.7601/S Bank D: British pound/Euro = £0.8864/€ Jane did her own direct cross rate calculation of the British pound/Euro and according to her the British pound/Euro = £0.8864/€ quotation from Bank D, provides her with an arbitrage opportunity, since the direct cross rate, based on the quotations of Bank Cis £0.8912/€. How much profit can Jane make from this opportunity? Use the space below to show the steps that Jane must take to make a profit. For example show all the steps in the following way in the space provided below (please note the example just show you how to write your steps since the currencies and exchange rates in the example are not applicable to the question): Step 1: Buy Yen with dollar 1000,000 at exchange rate of $1.0965/Yen = Yen 911,992 Step 2: Sell Yen 911,992 for Pound at exchange rate2.0561/Yen…
You are provided with the following exchange rate quotations: American Terms Bank quotations British pounds Bid Ask $1.9712 $1.9717 Euros $1.4738 $1.4742 Use the information in the table above to calculate the bid price of pounds in terms of euro (€/£). One of the following answers will be correct: а. 1.3371 b. 1.3378 c. 0.7475 d. 0.7479
Use the information below to answer the following questions. CURRENCY PER U.S. Polish Zloty Euro Mexican Peso Swiss Franc Chilean Peso New Zealand Dollar Singapore Dollar a. b. C. d. e. f-1. U.S. $ EQUIVALENT 2981 1.2243 0752 1.0204 002071 a. Zlotys b. Value of one euro Amount in dollars C. d. Which is worth more, a New Zealand dollar or a Singapore dollar? Which is worth more, a Mexican peso or a Chilean peso? How many Swiss francs can you get for a euro? (Round your answer to 4 decimal places, e.g., 32.1616.) f-2. What do you call this rate? .8089 .8012 If you have $120, how many Polish zlotys can you get? (Do not include the Polish zlotys sign, zl. Round your answer to 2 decimal places, e.g., 32.16.) How much is one euro worth in U.S. dollars? (Round your answer to 4 decimal places, e.g., 32.1616.) If you have 5.50 million euros, how many dollars do you have? (Enter your answer in dollars, not millions of dollars, rounded to the nearest whole dollar, e.g., 1,234,567.) $ 3.3546 .8168…
Use the information below to answer the following questions. U.S. $ EQUIVALENT CURRENCY PER U.S. $ Polish Zloty .2989 3.3456 Euro 1.2379 .8078 Mexican Peso .0752 13.2993 Swiss Franc 1.0299 .9710 Chilean Peso .002071 482.80 New Zealand Dollar .8083 1.2371 Singapore Dollar .8007 1.2489 a. If you have $280, how many Polish zloty can you get? (Do not include the Polish zloty sign (Z). Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. How much is one euro worth in U.S. dollars? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.) c. If you have 4.60 million euros, how many dollars do you have? (Do not round intermediate calculations and round your answer to…
Which one of the following best describes an agreement you make today to exchange U.S. dollars for British pounds three months from now? Multiple Choice Forward trade Spot trade Arbitrage transaction Cross-rate exchange Eurocurrency transaction
The following table shows PPP exchange rates (the price of 1 U.S. dollar in units of the foreign currency) for several countries, determined based on the Big Mac Index. PPP exchange rate (1USS=) United States (US$) Argentina (Peso) Australia (A$) Brazil (Real) Britain (£) Canada (C$) Chile (Peso) China (Yuan) В.75 1.17 2.33 0.61 1.12 469 3.54 a. According to this data, what are the predicted exchange rates between the following countries? i. Argentina and Australia ii. Brazil and Canada iii. Chile and China iv. China and Canada b. Suppose that a Canadian dollar buys more silver in Australia than it buys in Mexico. What does purchasing-power parity imply should happen?
Chapter 18, Question 4. Attached is a similar question with answers. Please answer in similar format
Use the information below to answer the following questions. Currency per U.S. $ 1.2380 1.2353 Australia dollar 6-months forward Japan Yen 6-months forward U.K. Pound 6-months forward 100.3600 100.0200 .6789 .6784 Suppose interest rate parity holds, and the current six month risk-free rate in the United States is 5 percent. Use the approximate interest rate parity equation to answer the following questions. a. What must the six-month risk-free rate be in Australia? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What must the six-month risk-free rate be in Japan? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Australian risk-free rate b. Japanese risk-free rate c. Great Britain risk-free rate c. What must the six-month risk-free rate be in Great Britain? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) % % %
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.
1) The following table contains exchange rate data for five countries: Country Big Mac Actual Price in Exchange Big Mac Price in $ Implied PPP of $ Over/under valuation (%) Local Rate Currency U.S. $3.20 $1.00/$ Norway K30.00 K10.25/$ Sweden K28.75 K10.10/$ Finland €2.85 €0.95/$ Iceland K410 K145/$ a) Compute the Big Mac price (in dollars) in each country. b) Compute the PPP-implied exchange rate for each currency. c) Compute the percentage over/undervaluation for each currency.

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