Question: BUSAD 4400 Problem Set #1 - Please show all work 1) Suppose the BMW 540i xDrive Se costs 46,645 in Germany and that the current
BUSAD 4400 Problem Set #1 - Please show all work 1) Suppose the BMW 540i xDrive Se costs 46,645 in Germany and that the current USD/EUR exchange rate is 8656. Calculate the dollar price of the BMW. 2) Consider the following exchange rates EUR/USD = 1.2500 (S/Euro) USD/CAD - 1.1000 (CAD/S) EUR/CAD = 1.3550 (CAD/Euro) How could you use this information to make money in the currency markets? 3) Suppose that you took a short position on 12,500,000 Japanese Yen future (remember, a short position involves selling Yen) at a price of 104.5 Yen/s. If the spot rate on the contract's expiration date was 103.45 Yen/S, calculate your profit/loss from the futures contract 1
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