Yesterday the spot exchange rate of yen to canadian

32. Yesterday the spot exchange rate of Yen-to-Canadian Dollar was 65. What is today's spot
exchange rate if the Yen has appreciated 10% against the Dollar today?
A. ¥58.50/$
B. ¥60/$1.10
C. ¥65/$
D. ¥75/$1.10
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Learning Objective: 24-01 Explain the difference between spot and forward exchange rates.
Topic: 24-02 Spot Exchange Rates
33. What is the expected spot rate of ¥/$(Canadian) one year from now if the current spot rate
is ¥66/$and the Yen is selling one-year forward at ¥70/$?
Blooms: Apply
Difficulty: Medium
Learning Objective: 24-02 Explain the basic relationships between spot exchange rates, forward exchange rates, interest rates, and inflation
rates.
Topic: 24-08 The Forward Rate and the Expected Spot Rate
24-13

Chapter 24 - International Financial Management
34. Consider the following spot exchange rates: $2.56/£, ¥65.62/$, DM1.0/$, and L1,263/$.
Which of the following seems to violate the law of one price if gold sells for $464 per ounce
in the Canada? Dollars in the exchange rates are Canadian.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Learning Objective: 24-01 Explain the difference between spot and forward exchange rates.
Topic: 24-02 Spot Exchange Rates
35. The following information is provided to you:
Spot exchange rate for Swiss franc = $0.61(U.S.)/Sfr
One-year forward rate for Swiss franc = $0.63(U.S.)/Sfr
One-year U.S. interest rate = 5%
What is the one-year interest rate for Swiss franc?
Blooms: Evaluate
Difficulty: Hard
Learning Objective: 24-02 Explain the basic relationships between spot exchange rates, forward exchange rates, interest rates, and inflation
rates.
Topic: 24-08 The Forward Rate and the Expected Spot Rate
24-14

Chapter 24 - International Financial Management
36. Suppose that:
If no other information is available, what will your guess about the spot rate in one year be?
A. 1.5331
B. 1.5372
C. 1.5502
D. 2.0000
Using the expectations theory of exchange rates, the forecast is $1 (US) = 1.5502 Canadian
Dollars.
Blooms: Apply
Difficulty: Medium
Learning Objective: 24-01 Explain the difference between spot and forward exchange rates.
Topic: 24-02 Spot Exchange Rates
Topic: 24-03 Forward Exchange Rates