6. (4 points) Triangular arbitrage makes a profit using the diference bet we a. the exchange rate in the market and the cross rate b. the forward exchange rate and the spot exchange rate e. 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 s. (4 points) Donna is planning a trip to Madrid, Spain for winter break. According to the travel suide book, her overall plan requires about 3,500 euros, ie. 1,500. Currently Citibank quotes that the bid and ask ptices are $1.12/ and $1.18/, respectively. To buy 3,500 as the initial budget, she needs to pay a. $2,966 h $3,125 c. $3,920 'd$4,130 Foregn currency, Foreign eurreneyx 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 w. supply and demand b. government e. major currencies d. currency basket 10. (4 points) We have experienced several so-called financial crises in the past. Chooe one crisis that occurred because of the reason other than international currency issue. a. Argentina Peso Crisis (2002) b. Asian Currency Crisis (1997) e. Subprime Mortgage Crisis (2008) d. Mexican Peso Crisis (1994)