PLEASE GIVE DETAILED SOLUTION FOR THE ANSWER: THANKS IN ADVANCE.

1.You are given the following exchange rate quotes in the markets identified:

Sydney	AUD/USD	1.8769
New York	AUD/USD	1.8600

Calculate the Australian dollar profit, if any, on a two-point arbitrage. Select one:

a. USD 0.0048

b. 16.9 points

c. Nil

d. AUD 0.0169

2. The price of a commodity in New Zealand is NZ$10 while the price of the same commodity in Australia is AU$6. The current exchange rate (NZD/AUD) is 1.15. What will happen based on the two prices and the current exchange rate? Select one:

a. Arbitrageurs will buy the commodity in Australia at NZ$10.00 and sell it in Australia at NZ$6.90 to make a profit of NZ$3.10

b. Arbitrageurs will buy the commodity in New Zealand at NZ$6.90 and sell it in Australia at NZ$10.00 to make a profit of NZ$3.10

c. Arbitrageurs will buy the commodity in Australia at NZ$10.00 and sell it in Australia at NZ$10.00 and break- even

d. Arbitrageurs will buy the commodity in Australia at NZ$6.90 and sell it in New Zealand at NZ$10.00 to make a profit of NZ$3.10

3. You are given the following exchange rate quotes in Sydney:

USD/AUD	0.5300
AUD/EUR	1.6428
USD/EUR	0.8782

Calculate the US dollar profit, if any, on a three-point arbitrage. Select one:

a. Nil

b. USD 1.0086 for every 1 USD invested

c. USD 0.0086 for every 1 USD invested

d. USD 0.0043 for every 1 USD invested

4. You are given the following exchange rate quotes in Sydney:

USD/AUD	0.5346
AUD/EUR	1.6428
USD/EUR	0.8782

Calculate the US dollar profit, if any, on a three-point arbitrage. Select one:

a. USD 0.0043 for every 1 USD invested

b. USD 0.2320 for every 1 USD invested

c. Nil

d. USD 1.0043 for every 1 USD invested

5. The price of a commodity in New Zealand is NZ$10 while the price of the same commodity in Australia is AU$6. The current exchange rate (NZD/AUD) is 1.15. What is the Australian dollar price compatible with the LOP at the current exchange rate? Select one:

a. 6.90

b. 8.70

c. 10.00

d. 1.67

6. You are given the following exchange rate quotes in the markets identified:

Sydney	AUD/USD	1.8900/1.9100
New York	USD/AUD	0.5100/0.5200

Calculate the Australian dollar profit, if any, on a two-point arbitrage. Select one:

a. AUD 0.0131

b. Nil

c. AUD 1.0131

d. 13.1 points

7. The price of a commodity in New Zealand is NZ$10 while the price of the same commodity in Australia is AU$6. The current exchange rate (NZD/AUD) is 1.15. At the current Australian dollar price, what is the exchange rate compatible with the LOP? Select one:

a. 0.60

b. 1.15

c. 1.67

d. no answer