$(3$ points$)$ Suppose the spot rate changed from $$1\mathrm{.}2204/$ to $$1\mathrm{.}1975/.$ What is the $\%$

appreciation$/$depreciation in the pound relative to the US dollar?

$9.(5$ points$)$ You are a currency trader based in the U$.$S$.$ for a multinational bank and you have

$$4,000,000$ bank credit available. You notice the following quotes:

Bid Ask

Bank of Montgomery $$0\mathrm{.}6248/$A$ $$0\mathrm{.}6254/$A$

BBC Bank $$0\mathrm{.}6240/$A$ $$0\mathrm{.}6246/$A$

Is locational arbitrage possible? If so$,$ show all steps. How much could you profit?

$10.(1$ points$)$ Which of the following limits a central bank$$s ability to manage their country$$s

own monetary policy? Fixed or Floating exchange rates.

$11.(4$ points$)$ What is the impossible trinity with regard to exchange rate systems?

$12.(2$ points$)$ Based on class discussion, what does ESG refer to with regards to corporate

governance?

$13.(3$ points$)$ What is an exposure with regards to corporate risk, and give an example?

$14.(2$ points$)$ Why does the eurocurrency market have smaller spreads between loan and deposit

rates than the domestic market?

$15.(3$ points$)$ What is the Korean discount, and give two reasons it occurred.