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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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