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Assume the exchange rate is .96 Swiss francs per U.S.dollar.How many U.S.dollars are needed to purchase 1,500 Swiss francs?


A) $1,521.21
B) $1,562.50
C) $1,528.80
D) $1,440.00
E) $1,418.46

F) B) and E)
G) B) and D)

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Assume the spot rate between the UK and the U.S.is £.6789 = $1,while the one-year forward rate is £.6782 = $1.The risk-free rate in the UK is 3.1 percent.The risk-free rate in the U.S.is 2.9 percent.How much profit can you earn for the year on a loan of $1,500 by utilizing covered interest arbitrage?


A) $4.09
B) $2.78
C) $3.15
D) $4.60
E) $3.55

F) None of the above
G) A) and E)

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The spot rate between Canada and the U.S.is C$1.1381 = $1,while the one-year forward rate is Can$1.1407 = $1.The risk-free rate in Canada is 2.4 percent.The risk-free rate in the U.S.is 2.1 percent.How much profit can you earn on a loan of $1,000 by utilizing covered interest arbitrage?


A) $.81
B) $.67
C) $.36
D) $.49
E) $.57

F) B) and E)
G) A) and E)

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Which one of the following is the best definition of Eurocurrency?


A) Any paper money used by a country that has adopted the euro as its common currency
B) Money deposited in a financial institution outside the country whose currency is involved
C) Both paper and coins officially adopted under the euro system of coinage
D) U.S.dollars owned by any country that has adopted the euro as its currency
E) Any exchange of funds between two countries that have adopted the euro as their official currency

F) D) and E)
G) C) and D)

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Which one of the following is the best universal definition of an exchange rate?


A) Price of one country's currency expressed in terms of another country's currency
B) Number of foreign dollars that can be purchased for every one U.S.dollar paid
C) Price of a country's currency expressed in terms of that country's currency unit
D) Number of units of a currency that were originally required to obtain one euro when a country adopted the euro as its official currency
E) Price that must be paid to obtain a good or service from another country

F) C) and D)
G) B) and E)

Correct Answer

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