# A credit 500000 b debit 500000 c debit 524492 d debit

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A) credit; \$500,000 B) debit; \$500,000 C) debit; \$524,492 D) debit; €512,100 C 21) The current exchange rate is £1.00 = \$2.00. Compute the correct balances in Bank A's correspondent ac- count(s) with Bank B if a currency trader employed at Bank A buys £45,000 from a currency trader at Bank B for \$90,000 using its correspondent relationship with Bank B.

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A) Bank A's dollar-denominated account at B will rise by \$90,000. B) Bank B's dollar-denominated account at A will fall by \$90,000. C) Bank B's pound-denominated account at A will rise by £45,000. D) Bank A's pound-denominated account at B will rise by £45,000. A 22) The spot market A) involves the almost-immediate purchase or sale of foreign exchange. B) takes place only on the floor of a physical exchange. C) involves the sale of futures, forwards, and options on foreign exchange. D) all of the options D 23) Country U.S. \$ equiv. Currency per U.S. \$ Tuesday Monday Tuesday Monday Britain (Pound) £62,500 1.6000 1.6100 0.6250 0.6211 1 Month Forward 1.6100 1.6300 0.6211 0.6173 3 Months Forward 1.6300 1.6600 0.6173 0.6024 6 Months Forward 1.6600 1.7200 0.6024 0.5814 12 Months Forward 1.7200 1.8000 0.5814 0.5556 Using the table shown, what is the most current spot exchange rate shown for British pounds? Use a direct quote from a U.S. perspective. A) \$1.00 = £0.625 B) \$1.72 = £1.00 C) \$1.61 = £1.00 D) \$1.60 = £1.00 B 24) Suppose that the current exchange rate is €1.00 = \$1.60. The indirect quote, from the U.S. perspective is A) €1.00 = \$1.60. B) €1.60 = \$1.00. C) €0.6250 = \$1.00. D) none of the options D 25) Suppose the spot ask exchange rate, S a (\$/£), is \$1.90 = £1.00 and the spot bid exchange rate, S b (\$/£), is \$1.89 = £1.00. If you were to buy \$10,000,000 worth of British pounds and then sell them five minutes later, how much of your \$10,000,000 would be "eaten" by the bid-ask spread?
A) \$1,000,000 B) \$100,000 C) \$52,910 D) \$52,632 A 26) Country U.S. \$ equiv. Currency per U.S. \$ Tuesday Monday Tuesday Monday Britain (Pound) £62,500 2.0000 1.9800 0.5000 0.5051 1 Month Forward 2.0100 1.9900 0.4975 0.5025 3 Months Forward 2.0200 2.0000 0.4950 0.5000 6 Months Forward 2.0300 2.0100 0.4926 0.4975 12 Months Forward 2.0400 2.0200 0.4902 0.4950 Euro £62,500 1.5000 1.4800 0.6667 0.6757 1 Month Forward 1.5100 1.4900 0.6623 0.6711 3 Months Forward 1.5200 1.5000 0.6579 0.6667 6 Months Forward 1.5300 1.5100 0.6536 0.6623 12 Months Forward 1.5400 1.5200 0.6494 0.6579 Using the table shown, what is the spot cross-exchange rate between pounds and euro? A) €1.00 = £0.75 B) £1.00 = €0.75 C) £1.33 = €1.00 D) none of the options D 27) The euro-pound cross exchange rate can be computed as: A) S (€/£) = B) S (€/£) = S (\$/£) × S (€/\$) C) S (€/£) = D) all of the options

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A 28) Suppose a bank customer with €1,000,000 wishes to trade out of euro and into Japanese yen. The dollar- euro exchange rate is quoted as \$1.60 = €1.00 and the dollar-yen exchange rate is quoted at \$1.00 = ¥120. How many yen will the customer get? A) ¥192,000,000 B) ¥5,208.33 C) ¥5,208,333 D) ¥75,000,000 A 29) American Terms European Terms Bank Quotations Bid Ask Bid Ask British pounds \$ 1.9712 \$ 1.9717 £ 0.5072 £ 0.5073 Euros \$ 1.4738 \$ 1.4742 0.6783 0.6785 Using the table above, what is the ask price of euro in terms of pounds? A) £0.7475/€ B) €1.3378/£ C) €1.3371/£ D) £0.7479/€ D 30) You are a U.S.-based treasurer with \$1,000,000 to invest. The dollar-euro exchange rate is quoted as \$1.20 = €1.00 and the dollar-pound exchange rate is quoted at \$1.80 = £1.00. If a bank quotes you a cross rate of £1.00 = €1.50, how much money can an astute trader make?
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• One '16
• robert bai
• Exchange Rate, Foreign exchange market, United States dollar

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