If an Australian based investor purchases a Euro-denominated Exchange Traded Fund (ETF) and the Euro subsequently appreciates in value relative to the Australian dollar, the Australian dollar return will have a total return that is: O A. Higher than the ETF's total return O B. The same as the ETF's total return OC. Lower than the ETF's total return

Suppose quotes for the dollar–euro exchange rate E$/€ are as follows: in New York $1.05 per euro, and in Tokyo $1.15 per euro. Describe how investors use arbitrage to take advantage of the difference in exchange rates. Explain how this process will affect the dollar price of the euro in New York and Tokyo.

Please quickly and with neat explanation.

Foreign exchange risk may be best defined as:a. the chance of value change in foreign exchange ratesb. the chance that the demand for your currency will dropc. the chance that exchange rates will be fixedd. the political risk posed by foreign governments

A Canadian investor is considering investing in France. Use the UIP condition to explain how each of the following situation would affect the value of the euro and the Canadian dollar. a. An increase in Canadian interest rates b. A decrease in France's interest rates c. A decrease in the expected future exchange rate, Ee CAD/E

Nikul

A Chinese investor invests in U.S. Treasury bills. If the Chinese renminbi (RMB) appreciates during the holding period against the U.S. dollar (USD), this investment   increases in value but default risk remains unchanged. declines in value and decreases in default risk. declines in value but default risk remains unchanged. increases in value and decreases in default risk.

According to the Interest Rate Parity (IRP) theory, if a country's interest rate is higher than that of another country, its currency should: A. Appreciate in the forward market. B. Depreciate in the forward market. C. Remain unchanged. D. Be more volatile.

For an investor who starts with dollars and wants to end up with dollars, which of the following choices is an example of speculating in the FX market? Sell dollars at the spot rate, invest the proceeds in foreign currency-denominated financial instruments, and sign a forward exchange contract to buy the foreign currency. Sell dollars at the spot rate, invest the proceeds in foreign currency-denominated financial instruments, and sign a forward exchange contract to buy dollars. Sell dollars at the spot rate, invest the proceeds in foreign currency-denominated financial instruments, and then buy dollars at the future spot rate. Buy a dollar-denominated financial asset.

Suppose there are no transaction costs. If the one year forward rate of the euro is an accurate estimate of the spot rate one year from now, then the actual cost of hedging payable will be: A. positive if the forward rate exhibits a premium, and negative if the forward rate exhibits a discount. B. positive. C. negative. D. zero.