6. (4 points) Triangular arbitrage makes a profit using the difference bet ween a. the exchange rate in the market and the cross rate b. the forward exchange rate and the spot exchange rate c. the domestic inflation rate and the foreign inflation rate d. the domestic interest rate and the foreign interest rate 7. (4 points) One can relate spot and forward exchange rates using a. Big Mac Index b. Interest Rate Parity c. Purchasing Power Parity d. The law of one price 8. (4 points) Donna is planning to NM that the bid and ask prices are $1.12/ and S1.18/, respect ng a trip to Madrid, Spain for winter break. According to the travel i.e. 3,500. Currently Citibank quotes ively. To buy 3,500 as the initial Currently guide book, her overall plan requires a budget, she needs to pay a. $2,966 b. $3,125 c. $3,920 d. $4,130 (Hint: Dirast Foreign currency, Foreign currency x Direct quotation Home currency Banks buy euros at the bid price and sell at the ask price.) 9. (4 points) Under a free float exchange rate regime, the FX rate is mainly determined by a. supply and demand b. government c. major currencies d. currency basket 1o. (4 points) We have experienced several so-called financial erises in the past. Choose one crisi that occurred because of the reason other than international currency issue a. Argentina Peso Crisis (2002) b. Asian Currency Crisis (1997) c. Subprime Mortgage Crisis (2008) d. Mexican Peso Crisis (1994)