Problem 5.14 – Venezuelan Bolivar​ (B)
Multinational Business Finance
Eiteman, Stonehill, and Moffett
15th Edition and 16th Edition
Compute the percentage change in January of the Venezuelan bolivar, then forecast the exchange rate for June.
Compute the percentage change in January of the Venezuelan bolivar, then forecast the exchange rate for June.
Determine the forward premium on the dollar and then using drop downs, determine which currency has a premium and which one has a discount in the forward market.
How can the cross rate between the Mexican peso and the euro be calculated given the spot rates?
Compute the triangular arbitrage opportunities for path #1 and path #2 by converting your funds at Citibank, National Westminster, and Deutschebank.
Calculate the cost of Grupo Bimbo’s dollar loan in peso-denominated interest based on purchasing power parity expectations, determine the real interest cost adjusted for inflation, and find the actual peso-denominated interest cost of the loan given the actual spot rate at the end of the year.
What is the dollar price of a Toyota Corolla from Osaka, Japan in the following situations: a) at the beginning of the year, b) assuming purchasing power parity holds at the end of the year, c) with 100% exchange rate pass-through at the end of the year, and d) with 75% exchange rate pass-through at the end of the year?
Theresa Nunn is planning a 30-day vacation in Pulau Penang, Malaysia, one year from now. The hotel charges a certain amount per day for a luxury suite plus meals, and any increase in the room charges will be limited to the increase in the Malaysian cost of living. Malaysian inflation is expected to be a certain percentage per annum, while U.S. inflation is expected to be another percentage. How much might Theresa need to pay one year from now for her 30-day vacation?
If PPP held, what should the Ps/$ exchange rate have been? Determine the percentage over or undervaluation of the Argentine peso, and then determine the probable causes of the undervaluation.
Given a data table of quotes from London and Yew York containing the Spot rates, the 1-year Treasury bill rates, and the expected inflation rates, you are asked to calculate the implied inflation for Europe next year, and also to compute the 1-year forward exchange rate between the dollar and the euro.
Determine the CIA (or UIA) profit potential, and conduct an interest arbitrage. Works on ALL arbitrage problems through 6.15.