Exchange Rate Problems

Exchange Rate Problems - = $2/ and the spot rate in t=1 of...

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Exchange Rate Problems Name:__________________________ Print your name in the space provided . Do the work in the space provided and staple the pages together before you submit them. These may only be submitted at class when due . You may not e-mail them in and late submissions are not accepted. 1) Given the 2 quoted spot rates $2/£, and $0.60/Rp (rupee) find the cross rate Rp/£. ANS:________________ 2) Given the current spot rate of $0.50/Dm (German mark) and tha 90 day forward rate of $0.55/Dm. Find the forward discount / premium. ANS:________________ 3) Given the spot rate in t=0 of e
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Unformatted text preview: = $2/ and the spot rate in t=1 of e 1 = $2.10/. What is the % appreciation/depreciation of the $? ANS:_________________ NAME___________________________ 4) Given the SR = $2/ , and FR 90 =$1.99/ and r US = 5% and r UK = 8%, a) Calculate r * (the home country currency rate of return). b) Would you see inward or outward interest arbitrage? 5) Given: r US = 7% and r FR = 12% and the spot rate e = $0.50/FF (French Franc), find the 1 year forward rate f 1 . 6) Given e = $2/, and i US = 4%, and i UK = 1%, where i is the respective rates of inflation. Find e 1 ....
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This document was uploaded on 10/30/2011 for the course ECON 220:300:06 at Rutgers.

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Exchange Rate Problems - = $2/ and the spot rate in t=1 of...

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