You are given the exchange rate between the U.S. dollar and the Canadian dollar. You are also given the exchange rate between the U.S. dollar and the Mexican peso. What is the name given to the Canadian dollar per Mexican peso exchange rate derived from the information that was provided?   Multiple Choice   Swap rate   Depositary rate   Forward rate   London Interbank rate   Cross-rate

Q: TIPS FOR READING AN EXCHANGE RATE CHART: Read down the chart. For example, in column 1 it says the…

A: Depreciation of a currency means that the value of the currency with respect to the other decreases,…

Q: critically discuss main causes of exchange rate volatility in the foreign exchange markets. Please…

A: Exchange rate volatility- It refers to the tendency of a currency of one country  to appreciate or…

Q: bank dealing in foreign currency tells you that the foreign currency will buy you $.80 US dollars.…

A: The correct option is (a) a direct quote

Q: The one-year interest rate in a European and a Mexican bank is 1% and 12% respectively. The spot…

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Q: assume that the one - year interest rate is 4.0 percent in the united states; the sp exchange rate…

A: One year US interest rate = 4%Forward Rate = $1.16Spot Rate = $1.25

Q: Suppose Dassie Bank quoted the exchange rate of Singapore dollar in US$ at $0.60, the pound rate in…

A: Currency arbitrage is a strategy that is used by investors to exploit the differences in exchange…

Q: You live in Australia and want to try to make some money through interest rate arbitrage abroad. You…

A: Arbitrage is the risk less profit that can by earned by buying and selling in two markets and taking…

Q: Based on the reading and the table above, is the exchange rate of dollars to pounds fixed or…

A: To determine whether the exchange rate of dollars to pounds is fixed or flexible, we need to look at…

Q: Explain the implications of interest rate parity and purchasing power for U.S. dollar exchange rate…

A: Interest Rate Parity (IRP) is a fundamental concept in international finance that establishes a…

Q: TIPS FOR READING AN EXCHANGE RATE CHART: Read down the chart. For example, in column 1 it says the…

A: The foreign exchange rates: The foreign exchange rates refer to the trading of one currency for…

Q: Calculate the cross rate between the EUR (the euro) and the INR (Indian rupee). Set it up as…

A: For Computing Cross Rate we first denote the Currency rate as follows A = INR B = USD C = EUR For…

Q: The next two questions are based on the following information Consider the following prices in the…

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Q: A Eurodollar deposit is..   a) a deposit denominated in euros at a US bank  b) a deposit…

A: The deposit is the amount or currency that individual has saved in place for getting interest and…

Q: Suppose that the exchange rates between euro, U.S. dollar and the yen are given in the table below.…

A: Three point arbitrage opportunity took place by using three different currencies, it includes buying…

Q: The following graph depicts the supply schedule for euros (orange line) and the demand schedule for…

A: The Equilibrium happens at a point where the demand and schedule intersects, the intersection point…

Q: Assume that the one-year interest rate is 3% p.a. in the UK and 2% p.a. in the Euro area. Also,…

A: Step 1: Analyzing the Interest Rate Parity (IRP) TheoryAccording to the IRP theory, the forward…

Q: Is there any violation of CIP? (b) Calculate the covered margin (going short on the AUD). (c)…

A: Here the spot rate is lower than the forward rate, so the EUR is selling at a premium.  The interest…

Q: Suppose Dassie Bank quoted the exchange rate of Singapore dollar in US$ at $0.60, the pound rate in…

A: Foreign exchange currency rates are those rates which are used for exchange of one foreign currency…

Q: Assume interest rate parity holds. The one-year risk-free rate in the U.S. is 3.38 percent and the…

A: Forward rate The forward rate is the rate used for financial transactions that will occur sometime…

Q: Which of the following factors influences the spread between forward and spot rates? a. which…

A: Spot rate is the current rate of the stock or bond or currency and forward rate is the price that is…

Q: Suppose the exchange rate between U.S. dollars and British Pounds is $1.00 = 1.70 Pounds and the…

A: Exchange rate between U.S. dollars and British Pounds = 1.70 Pounds per dollar Exchange rate between…

Q: Suppose that Cloudastries Bank is a U.S.-based financial intermediary that serves the foreign…

A: Exchange rates represent the relative value of one currency compared to another in the global…

Q: Using Exchange Rates Use the information below to answer the following questions.     U.S. $…

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Q: A bank in Mississauga has a buying rate of ¥1 = C$0.01275. If the exchange rate is ¥1 = C$0.01315,…

A: Buying rate = ¥1 = C$0.01275 exchange rate = ¥1 = C$0.01315

Q: Suppose the Japanese yen exchange rate is ¥116/$ and the British pond exchange rate is $1.27/£. a)…

A: Arbitrage refers to the strategy of earning profits by exploiting the difference in prices of the…

Instruments of Foreign Exchange Market

Foreign exchange is a worldwide market in which one nation’s currency is converted into another nation’s currency. In further terms, exchanging of nations currency with foreign currencies. Foreign exchange happens at a specified rate which is termed the foreign exchange rate. The exchange rates are not constant continuously changing as they are derived by market forces of supply and demand. Widely used foreign currencies are the United States- dollar, Euro, Japanese Yen, British pound, and Australian dollar. US- dollar is the most denominated foreign currency. The Euro to US dollar is a widely used currency pair in the forex market as these two currencies represent the world’s enormous economy. Forex trade is simple as exchanging currencies at the bank. The main players of forex markets are the central banks, financial institutions, intermediaries, investments banks, and other banks. Central Bank is the supreme player who decides the currency value of their own nation on the forex market. Mostly foreign exchange-traded at FX market (forex market) when tourists’ visits a foreign country, import, and export happens between two countries.