Central back has purchased foreign exchange from the mines

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Reference no: EM131551172

a. the central back has purchased foreign exchange from the mines amounting to 31million USD at a price of k10 per dollar. assuming there is no leakage in to currency in circulation and reserves in excess , why is the increase in deposits when the required reserve ratio is 15.5 %

b. compute the money multiplier when the currency to deposits ratio is 25% the required reserves ratio is 15.5% and the excess reserves to deposits is 4%.

c. as a hedge against interest rate risk, a firm has bought a 30th June 2017 financial futures contract on a 20% K100, 000 5 year Zambian government bond at k115,000. what is the firms profit if on 30th June the bond price is k110,000?

Reference no: EM131551172

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