Question 24 5pts Assume the following information: You borrowed $1,000,000 from the US Bank and want to invest that money in the UK market in 90 days. Current spot rate of pound = $1.30p 90 day forward rate for pound in the b Forward market = $1.28p 3 month deposit rate in US = 3% annual 3 month deposit rate in UK = 4% annual If you use b covered interest arbitrage for a 90 day investment, what will be the amount of Net US $ profit which is riskless you will have after 90 days? around $91, 240 around $97,400 around $95, 700 around $93,700

QUESTION 3 (a) KL Co. will be paying USD100,000.00 in 60 days. Assume the following interest rates: U.S. Malaysia 360-day borrowing rate 360-day deposit rate 7% 6% 5% 4% Assume the forward rate of the USD is RM4.20 and the spot rate of the USD is RM4.15. If KL Co. uses a money market hedge, how much will KL Co. be paying in 60 days?

Question 1 You are considering uncovered interest arbitrage between the pound (GBP) and the US dollar (USD). The following data is available to you: Funds available: 2 million GBP Spot exchange rate: 1.40 USD per GBP Spot exchange rate one year ago: 1.26 USD per GBP USD 3 month interest rate: 2.32% GBP 3 month interest rate: 0.75% a) Calculate the profit that would be made if the exchange rate remains at its current level in 3 months' time. b) How would the profit figure change if the US dollar continues to weaken at the same rate as it has done over the previous year?

Grammal Question 20 As a currency trader, you see the following quotes on your computer screen: Exch. Rate Spot 1-month 2-month 3-month 6-month JPY/USD 98.75/85 12/10 20/16 25/19 45/35 Suppose you want to swap out of JPY 10,000,000 and into USD for 6 months. What are the cash flows associated with the swap? O Receive 101,266$ now and pay 101,523$ in 6 months Receive 101,163$ now and pay 101.729$ in 6 months Receive 101,266$ now and pay 101,729$ in 6 months Receive 101,163$ now and pay 101,523$ in 6 months

Exercise 2 (LO 2) Spot rates and forward rates. On January 1, one U.S. dollar can be exchanged for eight foreign currencies (FC). The dollar can be invested short term at a rate of 4%, and the FC can be invested at a rate of 5%. 2. Calculate the 180-day forward rate to buy FC (assume 365 days per year).

Q. 30 Assume you have secured a loan of $10,000 from a bank  which will be paid in one year. The fin bank has offered you $850 monthly installments, which equates to a 3.67% annualized interest rate. The monthly interest rate of 0.31% is the annual rate divided by 12. You know that the interest is paid at the end of the period, so you can multiply the opening balance by the monthly interest rate to get the interest paid. What is the opening balance for the month of June?   Month    Payment             Interest    Principal    Opening Balance    Closing BalanceJanuary    $850.00            $10,000.00    February    $850.00                March    $850.00                April    $850.00                May    $850.00                June    $850.00                July    $850.00                August    $850.00                September    $850.00                October    $850.00                November    $850.00                December    $850.00                Monthly Rate    0.31%…

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

QUESTION 5 One has the following data regarding spot and 1 year forward for USDCHF Spot 1.2500 # of CHF to buy 1 USD F 1.2000 US interest rate Swiss interest rate 5.00% 3.14% All quotes above are "market"quotes, i.e. one can buy or sell USD, borrow or lend, at the stated rates. A practioner would say that the quote for F seems "out of line", thus there could be an arbitrage opportunity. What would be profit in USD from arbitrage on a notional amount of 100,000,000 USD? 2,031,250 2,437,500 1,950,000 2,949,375

QUESTION 9 Kim PLC and Edith PLC are two Irish companies. Both companies can lend or borrow money at either fixed or floating rates. On 1st March Kim PLC needed to borrow €1,000,000 and it chose a fixed rate loan. On the same date Edith PLC had cash of C1,000,000 which it chose to put on deposit at a floating rate. Which of the following statements is most plausible: O Kim expects interest rates to fall but Edith expects interest rates to rise O Both companies expect interest rates to fall O Both companies expect interest rates to rise O Edith expects interest rates to fall but Kim expects interest rates to rise

Question 2 You have the opportunity to store your hard-earned money in a French or a Japanese bank account. The Japanese bank account promises an interest rate of 2% a year. If you deposit 1000 Euro in the French bank account, interests will accrue so that you will have 1105 Euros in two years. Today's exchange rate is 1 Euro to 129.60 Yen. a) What should the 1-year forward exchange rate be for you to be indifferent between the two accounts? Make sure you explain what theories justify your calculations b) If the yearly inflation rate for France is 4%, what do you expect the Japanese inflation to be?