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Buy BRL spot.
None of the above. When covered interest rate parity holds
e. 4.7 there is no forward arbitrage opportunity.
forward exchange rates are always above spot exchange rates.
forward exchange rates are always below spot exchange rates.
forward exchange rate are always equal to spot exchange rates.
none of the above. According to the Uncovered Interest Rate Parity if the market expects an appreciation of
the US$ against both the DM and the ¥, and a depreciation of the DM against the ¥ in the
short run, then the short term interest rates can be ranked as
e. iJPY < iDEM < iUSD.
iJPY < iUSD < iDEM.
iUSD < iJPY < iDEM.
iUSD < iDEM < iJPY.
iDEM < iJPY < iUSD. 2 FBE 436
Answers to Problem Set #4 4.8 The September Swiss Franc (SFR) futures contract at the IMM is trading at 0.6939
$/SFR while the current spot rate is 0.6809. The standard contract size is SFR 125,000.
AT&T has a net debt of SFR 10,000,000 spot (short positio...
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This note was uploaded on 01/16/2010 for the course FBE 436 at USC.