quiz_2_va_solutions[1]

quiz_2_va_solutions[1] - Version A Fin 536 Quiz 2 Solutions

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Version A Fin 536 Quiz 2 Solutions Name_____________________Section_4pm/7pm 1. (5pts)Fill out the answers. a. Two banks quotes the following rates at the same time: Citibank NY quotes ¥105.20- 105.34/€ and Barclays London quotes ¥107.35-107.56/€. The ask prices of € from Citibank is ___¥105.34/€_ ___ and the ask price of ¥ from Barclays is __¥107.35€ ___. We can profit from buying __ euro ___(euro/yen) from Citibank and sell the ____euro ___(euro/yen) to Barclays. The profit will be ¥____2.01_ ___ per euro. b. Three banks are quoting the following rates: Citibank quotes ¥85/$; UBS quotes $1.29/€; Deutsche Bank quotes ¥112/€. If you start with $1000, your profit will be $___21.43_ _______from the triangular arbitrage. c. The exchange rate between Mexican peso and U.S. dollar was peso 8.5/$ in Jan 2009 and peos10/$ in Jan 2010, then Mexican peso has __ depreciated ___ (appreciated/depreciated) against peso by _____15_ ___% during the year. d. A Big Mac costs ¥290 in Japan, while it costs $3.5 in the U.S. The implied PPP exchange rate between yen and dollar is ¥____82.86 _____/$. If the actual market
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quiz_2_va_solutions[1] - Version A Fin 536 Quiz 2 Solutions

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