7

1. Currently, $1 will buy C$1.36 while $1.10 will buy 1. What is the exchange rate between the Canadian dollar and the euro?

   C$1 = 1.10

   C$1 = .9091

   C$1 = 1.2364

   C$1.36 = 1.10

   C$1.36 = .9091

QUESTION 8

1. The current spot rate is C$1.362 and the one-year forward rate is C$1.371. The nominal risk-free rate in Canada is 6 percent while it is 3.5 percent in the U.S. Using covered interest arbitrage you can earn an extra _____ profit over that which you would earn if you invested $1 in the U.S.

   $.0018

   $.0045

   $.0120

   $.0180

   $.0240

QUESTION 9

1. Assume that 107.62 equal $1. Also assume that 7.5415Skr equal $1. How many Japanese yen can you acquire in exchange for 6,200 Swedish krona?

   		419
   		434
   		41,719
   		46,757
   88,476

QUESTION 10

1. You can buy 240Canadian dollars with 100 British pounds. How much profit can you make on a triangle arbitrage given the following exchange rates if you start out with 100 U.S. dollars?

   Canada --> 1.3500 C$ per US$

   UK --> 1.8305 US$ per Pounds

   		$0.86
   		$0.93
   		$1.09
   		$1.17
   		$2.97