Mark Du Plessis lives in Johannesburg, South Africa. He can buy a euro for R16.2700 (South African rand). At the same time, Richard Nolan, living in Paris, can buy a South African rand for €0.0631. What is the foreign exchange rate between the South African rand and the euro?

Suppose that the current spot exchange rate is €0.85 per $ and the three-month forward exchange rate is €0.8313 per $. The three- month interest rate is 5.60 percent per annum in the United States and 5.40 percent per annum in France. Assume that you can borrow up to $1,000,000 or €850,000. Required: a. How will you realize a certain profit via covered interest arbitrage, assuming that you want to realize profit in terms of U.S. dollars? What will be the size of your arbitrage profit? b. Assume that you want to realize profit in terms of euros. Show the covered arbitrage process and determine the arbitrage profit in euros. How will you realize a certain profit and size of your arbitrage profit? Complete this question by entering your answers in the tabs below. Required A Required B How will you realize a certain profit via covered interest arbitrage, assuming that you want to realize profit in terms of U.S. dollars? What will be the size of your arbitrage profit? Note: Do not round…

Calculate the possible rate for buying GBP (Great Britain Pound) in exchange for selling JPY as well as the possible rate for selling GBP in exchange for buying JPY. Assume that the exchange rates are quoted as follows: USD 1 = JPY 104.50-104.60, GBP 1 = USD 1.3260 – 1.3265.

The dollar-euro exchange rate is $1.25 = €1.00 and the dollar-yen exchange rate is ¥100 = $1.00. What is the yen per euro cross rate? cross rate? €1.00 = ¥0.80 C1.00 = ¥125 €125 = ¥1.00 none of the options

P19–1 EXCHANGE RATE MOVEMENTS Suppose a basket of goods in Paris costs €133and the same basket purchased in New York costs $153. At what exchange rate between euros and dollars is the cost of the basket of goods the same in each city? Now suppose that over the next year inflation in France is expected to be 2% while in the U.S. the forecast is for 6% inflation. What exchange rate do you expect a year from today?

Suppose the Japanese yen exchange rate is ¥116/$ and the British pond exchange rate is $1.27/£. a) What is the yen to pound cross-rate? b) Suppose that a bank gives you a quote of ¥156/£. Is there an arbitrage opportunity here? If so, explain how to take advantage of the mispricing.

Han Co wishes to predict the exchange rate between the dollar ($) and the euro (€), based on the following information: Spot exchange rate $1= €1.6515 Dollar interest rate 4.5% per year Euro interest rate 6.0% per year Which of the following is the one-year forward rate, using interest rate parity theory? O $1= €1.2386 O $1= €1.6752 O $1= €2.2020 O $1= €1.6281

If one U.S. dollar buys 0.6 euro, hoe many dollars can you purchase for one euro?

Chapter 18, Question 4. Attached is a similar question with answers. Please answer in similar format

Suppose that the quote for Euro is 1.1120-44/EUR. If you want to buy 259, which of the following is closest to that amount of Euros that you will need to pay? O a. EUR 232.41 O b. EUR 288.32 O. EUR 232.91 O d. EUR 288.01 O e. EUR 288.63