uppose the world price of notebooks is $4.00. Suppose the pre-trade price of notebooks in France is $5.00. What would happen if France allowed trade in notebook

On January 31, 2019 the exchange rate between the US dollar and the euro was 1.14 USD/EUR. At the end of 2014, it was at 1.23 USD/EUR. Couple of years ago, A Big Mac cost 3.54 USD in the US. The price in the Euro Area was 3.42 EUR. Exchange rate was 1.28 USD/1 EUR. c) If law of one price would be true how much should it cost in the Euro Area? d) If Big Mac prices are perfect for determining PPP, is the Euro in comparison to the USD overvalued or undervalued? For how much? e) What is a definition of a nominal exchange rate in the value notation? Write an example.

Suppose that the interest rates in the U.S. and Germany are equal to 5%, that the forward (one year) value of the € is F$/€ = 1$/€ and that the spot exchange rate is E$/€ = 0.75$/€. Please answer the following questions by explaining all steps of your analysis: Does the covered interest parity condition hold? Why or why not? How could you make a riskless profit without any money tied up assuming that there are no transaction costs in buying and or selling foreign exchange? PLEASE SHOW ALL STEPS

D3) The spot rate of Kenya shillings to Euros was 132kes = 1 euro. The forward rate was Ke, 131 = 1 Euro. Calculate and explain the appreciation or depreciation of Euros against Kenya shillings.   State the implications of European investors in Kenya Explain the implication of the above scenario on Kenyan coffee exporters

In February 2022 the €/$ (euro/dollar) exchange rate was 0 88€/$ In France, a country that uses Euros as currency, the average price of a cinema ticket was 7€, while in the United States, a country that uses dollars as currency, the average price of a cinema ticket was $9 5 From this information we can infer that: Select one answer: 8. O The exchange rate is too low. The dollar should appreciate to ensure that purchasing power parity holds. O None of the above O The exchange rate is too low. The euro should appreciate to ensure that purchasing power parity holds. O The exchange rate is too high The dollar should appreciate to ensure that purchasing power parity holds.

A US based investor plans to invest $44,400 in Russia, where the interest rate is 6.65%. If the current exchange rate is $1 US buys 55 Rubles and the future expected exchange rate is $1 US buys 51.5 Rubles, then what is the future value of this investment? $50,570.7 $52,225.5 $52,990.0 O $54,040.4

Suppose a U.S. firm purchases some Chinese handicrafts. The china costs 1,000 Chinese yuan. At the exchange rate of $1.00 = 6.2 yuan, the dollar price of the goods is:

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

Your company sells specialized electronic components to South Africa payable in South African Rands (ZAR). The following information is available on the $/ZAR exchange rates expected to prevail at the end of the year. The local prices of the electronic components are affected by the value of ZAR as shown below. Qi (Prob)            Si                         Local Price (P’i)                Pi (price in dollars)              0.20                     $0.0550              ZAR 30,000.00                 $1,650.00          0.30                     $0.0600              ZAR 27,500.00                 $1,650.000.30                     $0.0650              ZAR 25,000.00                 $1,625.00          0.20                     $0.0700              ZAR 22,500.00                 $1,575.00           a. What is relationship, as measured by β, between $/ZAR rates and the component prices in US dollars. b. Explain how you can hedge the above exposure using currency futures. The one-year forward rate…

Suppose the Japanese yen exchange rate is ¥122 = $1 and the British pound exchange rate is £1 = $1.53. Suppose the cross-rate is ¥140 = £1. If there is, what would be the profit of the mispricing?