AU.S. firm is interested in acquiring a Malaysian company in the electronics industry. Suppose the U.S. and Malaysiall markets are segmented. Let MS stand for the Malaysian currency, Ringgit. Information relevant to the cost-of-capital calculations are as follows: U.S. Market ($) Malaysian Market (M$) B 0.70 1.02 гM 14.5% 16% rf 7.5% 8.3% Assume Uncovered Interest Parity (UIP) holds. What is the cost of capital in US$ to Malaysian investors? O 15.4% O 12.4% 16.2% O 13.2%

1. Assume the following exchange rates for the New Zealand dollar in terms of the US dollar: North Bank: Bid price = $.401 Ask price = S.404 South Bank: Bid price = $.398 Ask price = S.400 a. Explain the steps involved in locational arbitrage using $1 million. b. What would be your profit?

Assume your firm has transferred you to Zurich Switzerland. You work in the triangular arbitrage division. View the following exchange rates. Is an arbitrage opportunity available? If not, explain why an opportunity does not exist. If so, from the Swiss point of view show how to exploit the opportunity. CHF .8976 = $1.00, $.0130 = INR 1.00, INR 92.7904 = CHF 1 Now say instead of working in Zurich, you were employed in Mumbai, India. How does that change your thinking on the arbitrage?     PLEASE ANWSER CORRECTLY AND SHOW WORK

Suppose an American investor is given the current exchange rates in the following table. The listed quotations are American terms. British pound (E) Euro (C) Australian dollar (AU$) Given these rates, an Australian dollar can purchase $8.95 Exchange Rate $1.9760 / pound $1.5110/euro O $6.92 O $6.51 $0.9240/ Australian dollar $8.14 British pounds. indirect Magic Milling Company is a U.S.-based firm that produces stereos in Germany at a cost of € 128 (including production and transportation costs) and sells them in England for £ 102. Based on the exchange rate table given in the preceding question, what is Magic Milling Company's dollar profit for each unit sold? direct quotations stated in