These rates on the spot exchange market

Assignment Help Financial Management

Reference no: EM131518833

1. How could you profit if you see these rates on the spot exchange market? e$/£ = 1.6; e$/Fr = 0.6; eFr/£ = 3.2.

1) Use Fr to buy $; then use $ to buy £; last use £ to buy Fr

2) Use $ to buy Fr; then use Fr to buy £; last use £ to buy $

3) Use £ to buy $, then use $ to buy Fr, last use Fr to buy £.

4) Use Fr to buy £, then use £ to buy $, last use $ to buy £.

5) All of the above.

2. When many more international students come to the United States to pursue a bachelor's or a graduate degree, how does this event affect the exchange rate of US dollar?

1) US dollar is appreciated.

2) US dollar is depreciated.

3) The event does not affect the exchange rate of US dollar.

4) It is impossible to determine.

Reference no: EM131518833

Questions Cloud

The margin of safety : The unit sales price is $90, unit variable cost is $45, and the fixed costs per month are $5,000. The margin of safety is

Mutually exclusive alternatives for a new polisher : Final Finishing is considering three mutually exclusive alternatives for a new polisher.

New equipment instead of keeping their current equipment : What is the difference in net present values if Nautical Creations buys the new equipment instead of keeping their current equipment?

Decrease the interest rate required by investors : Which of the following bond provisions or factors would tend to decrease the interest rate required by investors?

These rates on the spot exchange market : How could you profit if you see these rates on the spot exchange market? e$/£ = 1.6; e$/Fr = 0.6; eFr/£ = 3.2.

Maximum sustainable growth rate for company : What is the maximum sustainable growth rate for this company?

The market portfolio has an expected return : Suppose the market portfolio has an expected return of 10% and a standard deviation of returns of 25%.

What are the IRRs of these two projects : What are the IRRs of these two projects? If you are told only the IRRs of the projects, which would you choose?

Arbitrage pricing theory does not make assumption : Arbitrage Pricing Theory does not make assumption about investors’ preferences and endowments.

User Account

All Pages