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Quiz 1 (Version B)Solution

# Quiz 1 (Version B)Solution - Version B Fin 536 Quiz 1...

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Version B Fin 536 Quiz 1 Solutions 1. (7pts)Fill out the answers. a. To purchase 2,500 British Pounds (£), you need _____3800___ 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 \$___-580_ __if Investment=\$380 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 B)Solution - Version B Fin 536 Quiz 1...

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