Jane Cruise has U.S. dollars ($) amounting to $1,000,000, and is provided with the following quotes: Bank C: Euro/US dollar = €0.8529/$ Bank C: British pound /US dollar £0.7601/S Bank D: British pound/Euro £0.8864/€ Jane did her own direct cross rate calculation of the British pound/Euro and according to her the British pound/Euro = £0.8864/€ quotation from Bank D, provides her with an arbitrage opportunity, since the direct cross rate, based on the quotations of Bank Cis £0.8912/€. How much profit can Jane make from this opportunity? Use the space below to show the steps that Jane must take to make a profit. For example show all the steps in the following way in the space provided below (please note the example just show you how to write your steps since the currencies and exchange rates in the example are not applicable to the question): Step 1: Buy Yen with dollar 1000,000 at exchange rate of $1.0965/Yen = Yen 911,992 Step 2: Sell Yen 911,992 for Pound at exchange rate2.0561/Yen - Pound 443,554.64 Step 3: Profit=

Jane Cruise has U.S. dollars ($) amounting to $1,000,000, and is provided with the following quotes: Bank C: Euro/US dollar = €0.8529/$ Bank C: British pound /US dollar £0.7601/S Bank D: British pound/Euro £0.8864/€ Jane did her own direct cross rate calculation of the British pound/Euro and according to her the British pound/Euro = £0.8864/€ quotation from Bank D, provides her with an arbitrage opportunity, since the direct cross rate, based on the quotations of Bank Cis £0.8912/€. How much profit can Jane make from this opportunity? Use the space below to show the steps that Jane must take to make a profit. For example show all the steps in the following way in the space provided below (please note the example just show you how to write your steps since the currencies and exchange rates in the example are not applicable to the question): Step 1: Buy Yen with dollar 1000,000 at exchange rate of $1.0965/Yen = Yen 911,992 Step 2: Sell Yen 911,992 for Pound at exchange rate2.0561/Yen - Pound 443,554.64 Step 3: Profit=

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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An Australian firm asks the bank for an AS/SFr quote because it received SFr and wants to change it to A$. A bank is quoting the following exchange rates against the US dollar for the Swiss franc and the Australian dollar: SFr/US$ = 1.4950-60 AS/USS = 1.5245-50 Calculate the cross ask rate for the A$/SFR by identifying the correct formula in the attached formula sheet. One of the following answers will be correct: a. 1.0201 b. 1.0213 c. 0.9813 d. 0.9803 Show your workings in the space provided as well as the correct answer. For example write your answer as follows in the space provided below: Spot ask rate (AS/SFR) = 1.4670/1.3980 = 1.0494
Use the information below to answer the following questions. U.S. $ EQUIVALENT CURRENCY PER U.S. $ Polish Zloty .2994 3.3406 Euro 1.2456 .8028 Mexican Peso .0752 13.2998 Swiss Franc 1.0352 .9660 Chilean Peso .002071 482.80 New Zealand Dollar .8080 1.2376 Singapore Dollar .8004 1.2494 a. If you have $275, how many Polish zloty can you get? (Do not include the Polish zloty sign (Z). Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. How much is one euro worth in U.S. dollars? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.) c. If you have 4.10 million euros, how many dollars do you have? (Do not round intermediate calculations and round your answer to…
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
Use the information below to answer the following questions. CURRENCY PER U.S. Polish Zloty Euro Mexican Peso Swiss Franc Chilean Peso New Zealand Dollar Singapore Dollar a. b. C. d. e. f-1. U.S. $ EQUIVALENT 2981 1.2243 0752 1.0204 002071 a. Zlotys b. Value of one euro Amount in dollars C. d. Which is worth more, a New Zealand dollar or a Singapore dollar? Which is worth more, a Mexican peso or a Chilean peso? How many Swiss francs can you get for a euro? (Round your answer to 4 decimal places, e.g., 32.1616.) f-2. What do you call this rate? .8089 .8012 If you have $120, how many Polish zlotys can you get? (Do not include the Polish zlotys sign, zl. Round your answer to 2 decimal places, e.g., 32.16.) How much is one euro worth in U.S. dollars? (Round your answer to 4 decimal places, e.g., 32.1616.) If you have 5.50 million euros, how many dollars do you have? (Enter your answer in dollars, not millions of dollars, rounded to the nearest whole dollar, e.g., 1,234,567.) $ 3.3546 .8168…
Use the information below to answer the following questions. U.S. $ EQUIVALENT CURRENCY PER U.S. $ Polish Zloty .2977 3.3586 Euro 1.2183 .8208 Mexican Peso .0752 13.2989 Swiss Franc 1.0163 .9840 Chilean Peso .002071 482.80 New Zealand Dollar .8086 1.2367 Singapore Dollar .8010 1.2485 a. If you have $200, how many Polish zloty can you get? (Do not include the Polish zloty sign (Z). Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. How much is one euro worth in U.S. dollars? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.) c. If you have 5.90 million euros, how many dollars do you have? (Do not round intermediate calculations and round your answer to…
Use the information below to answer the questions that follow. U.S. $ EQUIVALENT CURRENCY PER U.S. $ Poland zloty 0.2686 3.723 Jordan dinar 1.4104 0.709 Bahrain dinar 2.6525 0.377 New Zealand dollar 0.6414 1.5591 Australia dollar 0.7002 1.4282 If you have $4, how many Poland zlotys can you get? How much is one Poland zloty worth? If you have 4 million Poland zlotys, how many dollars do you have? How many Jordan dinars can you get for a Poland zloty? What is the rate of the most valuable currency listed? What is the rate of the least valuable currency listed?
Sonipto needs to purchase Pakistani currency (PAK). He takes C$7,500 to the bank and leaves the bank with NOK 49,419.23. If the exchange rate is PAK 6.9511 per C$, determine the commission rate (rounded to two decimals) charged by the bank.
You observed the following quotes between Canadian dollars (CS), euros (€) and Swiss francs (CHF) on 3/1/XX: C$1-.90, CS.70/CHF On 3/2/xx, quotes for each currency were as follows: C$1.15-1, Cs.75/CHF You converted 600,000 Swiss francs into euros on 3/1. On 3/2 you converted your euros back to Swiss francs. How many francs would you have on 3/2? flound intermediate steps to four decimals. 715,555 56 665357.14 246,521.74 579,587.4
Given the information below, what is the cross-rate of the Singapore dollar in euros (i.e., Euros /Singapore dollar? Enter your answer with two decimals. Singapore dollar in US dollars (USD/SGD) 0.73 Euro in US dollars (USD/EUR) 1.26 Singapore dollar in euros (EUR/SGD) 0.65
You can exchange $1 for either .9102 euro or .7233 British pounds. What is the cross-rate in terms of pounds per euro?
Peter Sheffield has Euros (€) amounting to €500,000 and is provided with the following quotes: Bank A: Euro/US dollar = €0.8418/$ Bank A: British pound /US dollar = £0.7538/S Bank B: British pound/Euro = £0.8863/€ Determine whether an arbitrage opportunity exists. Show your calculation in the space below and briefly explain (in one or two sentences) why the arbitrage opportunity exists or not. For example, show your calculation as follows (The currencies used in the example are not applicable to your calculation. It just provide you with information how you should show your calculation): Yen/ZAR = 11.7654/1.3954 = 8.4316 (Round your answer to 4 decimals) Reason why arbitrage opportunity exists/ does not exist:
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).

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