Case Assignment 5
1. The first arbitrage opportunity relates to locational arbitrage. Holt has obtained spot rate
quotations from two banks in Thailand: Minzu Bank and Sobat Bank, both located in Bangkok.
The bid and ask prices of Thai baht for each bank
1. What are the advantages and disadvantages for Blades to use currency option
contracts and currency futures contracts to hedge its 12.5 million yen payables
If Ben Holt decides to use currency options contracts to hedge it holds several
1. When a change in THB value from a value of $ 0.024 to $ 0.020, is THB depreciated
or appreciated and by how much?
THB is being depreciated against the dollar by $.004. Depreciation is defined as a
decrease in a currencys value, particularly a
1. Considering only the interest rate differentials of 14% interest rate in Thailand versus
7% in the US, does investing excess funds in Thailand a good decision? Why and why not?
Only considering the rate differentials, and excluding any implications of
1. How will Blades be negatively affected by the high level of inflation in Thailand if the Thai
customer renews its commitment for another 3 years?
Assuming the Thai customer renews their commitment for another three years, the price Blades
receives in b
Case Assignment 1
1. If Thai baht and USD exchange rate remains fixed for the next 8 months due to the current
pegged exchange rate policy, how could a higher level of inflation in Thailand than that of the
US affect Blades import and export during this p
1. For Blades THB transaction exposure, should Blades hedge its cash inflows
(receivables from its export), or its cash outflows (payables from it import), or
total cashflows (inflows plus outflows) or net cashflows (the differences between
inflows and ou
Economics 243-01 Midterm examination October 19, 2000
Instruction: Put your name and social security number on the question sheets and the blue book. Put your
answers in the blue book only. Turn in both at the end of the examination. Part A: Multipl
Economics 243-01 Quiz 1 September 14, 2000 Multiple choice questions. Circle the best alternative to complete the statement or answers the question. 1. The two countries that account for the majority of U.S. current account deficits in r
Economics 243-01 Final Examination December, 2000
Instructions: Put your name, social security number and your seat number on the blue book provided. Put all
your answers in the blue book provided. Turn both question sheet and blue book in at the en