Foundations Of Finance
10th Edition
ISBN: 9780134897264
Author: KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher: Pearson,
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Chapter 16, Problem 6SP
Summary Introduction
To determine: Spot rates of Country C dollar to Country J yen and Country J yen.to Country S Franc.
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The following are quotes for four currencies with the quote in terms of US dollars per unit. Complete the values in the second column:
Currency
Units Per US Dollars
US Dollars Per Unit
EUR (eur)
?
1.1325477382
GBP (British pound)
?
1.3077000000
INR (Indian rupee)
?
0.0148968912
AUD (Australian dollar)
?
0.76263500000
You observe that the direct quote for the Canadian dollar from the US perspective is
$0.727. What is the indirect quote for the US dollar from the Canadian perspective?
Submit your final answer rounded to four decimal places (Ex. 0.0000).
Analyze the attached bar chart and comment on the behavior of the EUR/USD pair with reference to (i) bar chart, (ii) trading volume, (iii) trendlines, (iv) uptrend reversals, (v) downtrend reversals, and moving averages.
Chapter 16 Solutions
Foundations Of Finance
Ch. 16 - Prob. 1RQCh. 16 - Prob. 2RQCh. 16 - What is meant by arbitrage profits?Ch. 16 - Prob. 4RQCh. 16 - Prob. 5RQCh. 16 - Prob. 6RQCh. 16 - Prob. 7RQCh. 16 - Prob. 8RQCh. 16 - Prob. 9RQCh. 16 - Prob. 1SP
Ch. 16 - Prob. 2SPCh. 16 - Prob. 3SPCh. 16 - Prob. 4SPCh. 16 - (Exchange rate arbitrage) You own 10,000. The...Ch. 16 - Prob. 6SPCh. 16 - Prob. 7SPCh. 16 - Prob. 8SPCh. 16 - Prob. 9SPCh. 16 - Prob. 10SPCh. 16 - Prob. 11SPCh. 16 - (Purchasing-power parity) Lets assume a McDonalds...Ch. 16 - Prob. 1MCCh. 16 - Prob. 2MCCh. 16 - Prob. 3MCCh. 16 - d. What are the differences among a forward...Ch. 16 - Prob. 5MCCh. 16 - Prob. 6MCCh. 16 - Selling Quotes for Foreign Currencies in New York...Ch. 16 - Prob. 8MCCh. 16 - Prob. 9MC
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- A treasurer of a company got the following quotation from an FX dealer: "The dollar euro is sixty-two ten-fifteen, thirteen-thirty-one". What is the forward rate? Select one: a. USD/EUR 0.6210-15 b. AUD/EUR 0.6210-15 c. USD/EUR 0.6223-46 d. AUD/EUR 0.6223-46 e. USD/EUR 0.6184-97arrow_forwardLet say, the spot rate of Swiss franc is $0.88 and the Canadian dollar is $0.35. The value of the Canadian dollar in Swiss franc is _______. A. about 0.3977 Swiss franc B. about 2.36 Swiss franc C. about 0.3621 Swiss franc D. about 2.51 Swiss francarrow_forwardThe following graph plots the percentage change in the spot rate for a foreign currency along the horizontal axis, while measuring the interest rate differential (between a home country and a foreign country) along the vertical axis. in refers to the interest rate in the home country, while if refers to the interest rate in a foreign country. On the following graph, use the blue line (circle symbol) to plot the combinations of percentage change of the foreign currency spot rate and interest rate differential that are consistent with the international Fisher effect (IFE) theory. ih - if (%) 7 6 5 IFE Line 4 3 2 1 0 -1 -2 -3 -4 4 5 6 -5 -7 -7 -6 -5 -4 -3 -2 -1 1 2 3 4 5 67 Change in Foreign Currency Spot Rate (%) ?arrow_forward
- assume the direct quote on the euro is 2.14 and the indirect quote on the Swiss franc is 0.76. what is the cross-rate for euro's in terms of Swiss francs?arrow_forwardFor the below questions use these rates that your bank has quoted you: EUR/USD: 1.0175 – 1.0180 GBP/USD: 1.2065 – 1.2070 USD/CAD: 1.2930 – 1.2935 USD/JPY: 134.85 – 134.90 AUD/USD: .6905 - .6910 Calculate the following crosses: EUR/GBP EUR/JPY AUD/JPY GBP/CAD GBP/JPY CAD/JPYarrow_forwardAssume that USD 1 is equal to JPY 98.56 and also equal to CAD 1.22. Based on this, the CROSS-RATE is:arrow_forward
- The following table shows an example of gross domestic product values for five countries from 2005 to 2010 in equivalent U.S. dollars (). a. How could you improve the readability of this table? b. The file GDPyears contains sample data from the United Nations Statistics Division on 30 countries and their GDP values from 2005 to 2010 in U.S. dollars (). Create a table that provides all these data for a user. Format the table to make it as easy to read as possible. Hint: It is generally not important for the user to know GDP to an exact dollar figure. It is typical to present GDP values in millions or billions of dollars.arrow_forwardSuppose the Swiss franc exchange rate is sf.9703=$1, and the euro exchange rate is €.8024=$1. What is the cross-rate in terms of Swiss franc per euro.arrow_forwardCalculate the cross rate between the EUR (the euro) and the INR (Indian rupee). Set it up as INR/EUR. The following is a list of available rates:USD 1.17/EURUSD 0.27/SAR SAR 4.38/EUR INR 64.4/USD Options are:EUR 17.388/INR EUR 0.0575/INR INR 75.348/EUR INR 17.388/EURarrow_forward
- 4) Suppose the Canadian dollar (CAD) is quoted at 1.3240 - 55 CAD/USD and the Euro is quoted at 0.8220 - 55 EUR/USD. What is the direct quote for the Canadian dollar in France?arrow_forward1. Based on the latest exchange rates, how much does one US$, Euro, British Pound, Mexican Peso, and Japanese Yen cost in CAD$ - Rounded to four decimal places. (Please provide the website and date when you retrieved your data!)arrow_forwardThe following exchange rates are available to you:Beginning Funds in Swiss Franc (SF) = 10,000,000Yen / $ = 120SF / $ = 1.6Yen / SF = 80Compute the arbitrage profit.arrow_forward
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