The point E on the International Fisher Effect graph below suggests there would be no advantage of investing in foreign or domestic deposits relative to a particular foreign currency because while -=-3%, the exchange rate differential change is also -3% In-/ (%) -5 ●H -3 m 2 5 -3 -5 IFE Line 91 5 % A in the Foreign Currency's Spot Rate

Use the information below to answer the following questions. Currency per U.S. $ 1.2380 1.2353 Australia dollar 6-months forward Japan Yen 6-months forward U.K. Pound 6-months forward 100.3600 100.0200 .6789 .6784 Suppose interest rate parity holds, and the current six month risk-free rate in the United States is 5 percent. Use the approximate interest rate parity equation to answer the following questions. a. What must the six-month risk-free rate be in Australia? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What must the six-month risk-free rate be in Japan? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Australian risk-free rate b. Japanese risk-free rate c. Great Britain risk-free rate c. What must the six-month risk-free rate be in Great Britain? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) % % %

Please quickly and with neat explanation.

What is the expected percentage change in the value of the foreign currency (e) if you combine all three techniques, which are equally weighted? Method Technical forecasting Fundamental forecasting Market-based forecasting O 0.3% O 4.6% O 4.7% 2.0% Forecasted e 2% -4% 8%

Please use the data below, to answer the following question. BigMac price in the US BigMac price in Mexico Current Exchange Rate O overvalued by 14.29% O undervalued by 14.29% O overvalued by 12.50% O undervalued by 12.50% USD 3.50 12 MXN 80 Based on PPP, the MXN is 1 USD - MXN 20 140 15 16 (2 hp

When the value of the euro increases compared to the U.S. dollar, the price of U.S. exports to Europe will decrease. True or False True False

Short-run exposure to exchange rate risk is best illustrated by which one of the following?   Multiple Choice   Change in book value when the market value of an asset remains constant   Daily fluctuations in the spot rate   Increases in the forward rate as the time to settlement increases   Changes in relative economic conditions between two countries   Unrealized foreign exchange gains

Question 12 Given the following cross currency rates, identify an arbitrage trade and show the profit if you start with $1,000. (USD = U.S. dollar, SGD = Singapore dollar, CHF = Swiss franc) SGD:USD CHF:USD SGD:CHF 1,045.46 3.00 1.50 2.20

Rahul

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.