F08 Foreign Exchange Exam

F08 Foreign Exchange Exam -...

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Fall 2008 Foreign Exchange Questions for Exam Two Turn in with your Exam Two Blue Book You may use any information to do this part of the exam, but you must do your own work and sign the following statement saying you did your own work. I did my own work on this exam. Signed __________________ Use the following September 24th, 2008 and October 24th, 2008 rates to answer these questions. October 24 th 2008 September 24 th , 2008 Country / Currency in US $ Per US $ in US $ Per US $ Canada (dollar) .7857 1.2728 .9645 1.0368 1 Month Forward .7861 1.2721 .9650 1.0363 Euro 1.2585 .7946 1.4620 .6840 Japan (yen) .010571 94.60 .009425 106.10 1 Month Forward .010590 94.43 .009460 105.71 Switzerland (franc) .8549 1.1697 .9163 1.0914 UK (pound) 1.5904 .6288 1.8469 .5414 1 Month Forward 1.5882 .6296 1.8454 .5419 Each of the four questions is of equal weight. 1. Questions on Reading the Forex Tables. Show the Units or you won’t get credit . a. How much does my dollar buy in Euros on September 24 th ? b. Is the Swiss franc or the Euro worth more in dollars? c. How much will a Canadian dollar buy in Euros? (Remember, show the units) d. Agree or disagree: We can see that the UK pound is the stronger currency by looking at its October 24 th spot value in the foreign exchange table above. Explain in a sentence. 2. Question on Forward Rates Which of the three currencies listed with forward rates of September 24th is expected to increase in value (or decrease less) on September 24 th . Express this answer in the form of a premium and discount. Show your work and the units or you will not get full credit. Forward rates indicate expectations. Looking at the three currencies, in which currency
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did expectations of future change differ the most compared to a month earlier? Again, use premium and discount calculations to show this clearly. 3.
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This note was uploaded on 02/10/2009 for the course MGMT 370 taught by Professor Tomroehl during the Fall '08 term at Western Washington.

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F08 Foreign Exchange Exam -...

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