Tiêu đề Reading 5 Currency Exchange Rates - Understanding Equilibrium Value.pdf ✅

Question #1 of 43 Question ID: 1472247 A bank in Canada is quoting CAD/USD 1.4950 − 1.5005, and USD/EUR 0.9350 − 0.9400. What is bid/ask exchange rate for CAD/EUR? A) CAD/EUR 1.3978 − 1.4105. B) CAD/EUR 0.6254 − 0.6264. C) CAD/EUR 1.5904 − 1.6048. Question #2 of 43 Question ID: 1472275 Under the Mundell-Fleming model and the portfolio balance approach to exchange rate determination, a country following sustained expansionary fiscal policy would see its currency: A) appreciate in the short-run and depreciate in the long-run. B) appreciate in the short-run and appreciate in the long-run. C) depreciate in the short-run and depreciate in the long-run. Question #3 of 43 Question ID: 1508650 Today, the spot rate on pounds sterling is $0.6960 and 90-day forward pounds are priced at $0.6925. The forward discount/premium is: A) premium of $0.0035. B) premium of $0.0005. C) discount of $0.0035. Question #4 of 43 Question ID: 1472255

Ninety days ago, Marc Samuelson entered into a 180-day forward contract to purchase 1 million CHF at an all-in rate of $1.0225/CHF. The following USD/CHF quotes are currently available in the market: Spot 1.0301/1.0302 30 days –12.3/–11.9 90 days –16.0/–14.8 180 days –18.9/–17.8 Interest rates: 90-day CHF 1.02% 180-day CHF 1.03% 90-day USD 1.00% 180-day USD 0.99% The mark-to-market value of Samuelson's position is closest to: A) $7,585. B) $5,985. C) –$6,735. Question #8 of 43 Question ID: 1472254 Assume an investor living in Mauritius can borrow in $ or in Mauritius Rupee (MUR). Given the following information, determine whether an arbitrage opportunity exists. If so, how much would the arbitrageur profit by borrowing MUR 1,000,000 or the equivalent in $? (Assume a period of one year and state the profit in domestic currency terms.) Spot rate (MUR/$) 30.73000 Forward rate (MUR/$) 31.50000 Domestic (MUR) interest rate (%) 6.50% Foreign ($) interest rate (%) 5.20% Which of the following is closest to the correct answer?
A) Borrow domestic. Arbitrage profits are $39,685. B) Borrow MUR. Arbitrage profits are MUR 13,340. C) Borrow $. Arbitrage profits are $13,340. Question #9 of 43 Question ID: 1472244 Given spot exchange rate of CAD/EUR 1.425-1.435, The spread is closest to: A) 10 pips EUR B) CAD 0.010 C) CAD 0.0010 Jennifer Nance has recently been hired as an analyst at the Central City Bank in the currency trading department. Nance, who recently graduated with a degree in economics, will be working with other analysts to determine if there are profit opportunities in the foreign exchange market. Nance has the following data available: U.S. Dollar ($) U.K. Pound (£) Euro(€) Expected inflation rate 6.0% 3.0% 7.0% One-year nominal interest rate 10.0% 6.0% 9.0% Market Spot Rates U.S. Dollar ($) U.K. Pound (£) Euro(€) U.S. Dollar ($) $1.0000 $1.6000 $0.8000 U.K. Pound (£) 0.6250 1.0000 2.0000 Euro (€) 1.2500 0.5000 1.0000 Market 1-year Forward Rates U.S. Dollar ($) U.K. Pound (£) Euro(€) U.S. Dollar ($) $1.0000 $1.6400 $0.8082