quiz_2_vb_solutions[1]

quiz_2_vb_solutions[1] - Version B Fin 536 Quiz 2 Solutions

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Version B 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 ¥105.34- 105.44/€ and Barclays London quotes ¥107.56-107.78/€. The ask prices of € from Citibank is _____105.44/€ ____ and the ask price of ¥ from Barclays is __¥107.56/€ ___. We can profit from buying __ euro ___(euro/yen) from Citibank and sell the ____euro ___(euro/yen) to Barclays. The profit will by ¥___2.12__ __ 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 $2000, your profit will be $___42.86 ______from the triangular arbitrage. c. The exchange rate between Mexican peso and U.S. dollar was peso 8.8/$ in Jan 2009 and peos10/$ in Jan 2010, then Mexican peso has __ depreciated ______ (appreciated/depreciated) against peso by ___12 ____% during the year. d. A Big Mac costs ¥310 in Japan, while it costs $3.5 in the U.S. The implied PPP exchange rate between yen and dollar is ¥___88.57_ _____/$. If the actual market
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This note was uploaded on 09/06/2011 for the course FIN 536 taught by Professor Staff during the Spring '11 term at S.F. State.

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quiz_2_vb_solutions[1] - Version B Fin 536 Quiz 2 Solutions

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