Problem 5.16 – Direct Forward Discount on the Dollar
Multinational Business Finance
Eiteman, Stonehill, and Moffett
15th Edition
Determine the forward premium or discount on the dollar and the pound using a 360-day year.
Determine the forward premium or discount on the dollar and the pound using a 360-day year.
Compute the triangular arbitrage opportunities for path #1 and path #2 by converting your funds at Citibank, National Westminster, and Deutschebank.
Determine the exchange rate between the peso and $ if PPP held, the percentage undervaluation of the Argentinian peso, and the causes for the rapid decline in the peso’s value.
Determine the difference in rates and forecasted exchange rate between the yen and the dollar.
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?
Determine the percentage over or undervaluation of the kuna.
Determine the CIA (or UIA) profit potential, and conduct an interest arbitrage. Works on ALL arbitrage problems through 6.15.
Given spot exchange rates, the Treasury bill rate, and the inflation rate, calculate the expected inflation in Europe and the forward exchange rate between the dollar and the euro.
Determine the value of Tony’s position if Tony buys or sells a certain number of contracts on the British pound.
Determine the value of the person’s position given various spot rates at maturity of the futures contracts.