4500.4 - 4/7/2011 First Exam Problem 1 (Source: Set 1, #1 &...

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4/7/2011 1 First Exam Problem 1 Kr6.0935 ZUR Norway Kr 1 = Baht 5. 4069 CHF 1 Bangkok Baht32.9469 CHF 1 Equilibrium
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4/7/2011 2 Fisher Effect: R = r + i + ri • Prob 2: r = 3% i = 2% R = 5.06% (Source: Set 1, #10-15) Problem 3 (Source: Set 2, #8) $1 = £0.6249 spot New York • Find price of a put to sell£61 in exchange for $100 (exchange at the forward rate) Answer London • £4. 28 buys a call to receive$100 in exchange for £61 (exchange at the forward rate) Answer: £4. 28 /0.6249 = $6. 85
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3 Problem 4 CHF 0.92 NY ZUR €1 = CHF 1. 2958 $1 FRA €0.71 $1 Equilibrium Problem 5 Direct Approach 2 Step Approach •N = 5 • I/YR = 5.06% •P /YR = 1 • FV = 1000 2-Step Approach •N = 2%
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This note was uploaded on 04/15/2011 for the course FINA 4500 taught by Professor Staff during the Spring '08 term at North Texas.

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4500.4 - 4/7/2011 First Exam Problem 1 (Source: Set 1, #1 &...

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