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# 1.The exchange rates in New York are: \$1 = AUD 1.2958 and \$1 = 0.6659 A dealer is offering a quote: AUD 1 = 0.7896. What is the profit you can earn

1.The exchange rates in New York are: \$1 = AUD 1.2958 and \$1 = £0.6659

A dealer is offering a quote: AUD 1 = £0.7896.

What is the profit you can earn on \$15,386 using triangle arbitrage?

2.ABC Inc.'s stock is currently selling for \$22.82 per share. The company just paid its first annual dividend of \$1.77 a share. The firm plans to increase the dividend by 6.7 percent per year indefinitely. What is the required rate of return on equity?

3.Suppose you have the following information:

\$1 = £0.6818

\$1 = C\$1.4044

What is the £/C\$ cross rate?

4.ABC Company writes 46 checks a day for an average amount of \$415 each. These checks generally clear the bank in 2 days. In addition, the firm generally receives an average of \$23,879 a day in checks that are deposited immediately. Deposited funds are available in 2 days. What is the firm's net float?

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