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The following rates are quoted for C$ in terms of US dollar ($) and Australian dollar (A$) in New York: $/C$ = 0.9650 A$/$= 1.

1.        The following rates are quoted for C$ in terms of US dollar ($) and Australian dollar (A$) in New York:


$/C$ = 0.9650                        A$/$= 1.0250

(a)  What are the (implied) quote for $ in terms of C$ and for A$ in terms of $ in the above rates?

(b) What is the cross rate for C$ in terms of A$ (A$/C$) implied in the above rates?


2.        Suppose Dow Chemical receives quotes of $0.009369-71 for the yen and $0.03675-6 for the Taiwan dollar (NT$).

a.             How many US$ will Dow Chemical receive from the sale of ¥50 million?

b.             What is the US$ cost to Dow Chemical of buying ¥1 billion?

c.             How many NT$ will Dow Chemical receive for US$500,000?


3.        You see the following three month swap quote for C$: $0.9650-60 20-25. Using this information, determine the three month outright forward rate for C$.


4.        The Japanese yen (¥) changed its price in terms of dollars from $0.0905 to $0.0915 in 30 days.

(a) What is the percentage change in the price of ¥? 

(b) What is the implied percentage change in the price of US$?

(c) State these changes in annualized percentage.

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