Quiz 1 (Version A)Solution

Quiz 1 (Version A)Solution - Version A Fin 536 Quiz 1...

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Version A Fin 536 Quiz 1 Solutions 1. (7pts)Fill out the answers. a. To purchase 1,500 British Pounds (£), you need ___2280__ U.S. dollars if the current spot exchange rate is S($/£)=1.52. b. In 2004, the U.S. was running a deficit of $550 on the current account and a surplus of $540 on the capital and financial accounts, ignoring the statistical discrepancy, the balance on the U.S. reserve account was ___10__ ___. The amount of reserve in U.S. ___ decreased (increased/decreased) during the year. The balance of the U.S. Federal Budget was $_-560_ ____if Investment=$400 and Savings=$410. c. Two banks quotes the following rates at the same time: Citibank NY quotes SF1.21- 1.23/€ and Barclays London quotes SF1.17-1.19/€. The ask price of SF from Barclays ___€0.8547/SF or SF1.17/€_____. The bid price of SF from Citibank is ___€0.8130/SF or SF1.23/€_____. You can profit from buying € from ___ Barclays _ (Citibank/Barclays) and selling € to __ Citibank ___(Citibank/Barclays). The profit is SF___.02____ per euro. d.
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Quiz 1 (Version A)Solution - Version A Fin 536 Quiz 1...

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