Question: Problem 7: Based on the information in Problem 6, if you can borrow 100,000 units in the synthetic forward position at teo, what would your

Problem 7: Based on the information in Problem 6, if you can borrow 100,000 units in the synthetic forward position at teo, what would your profit be from CIRP arbitrage (in USD)? Problem, 8: Assume that rEUR-10%, rusD-3% and XUSD/EUR = 1.32. You want a long forward position in EUR 210,000 1-Year forward, i.e. receive EUR one year in the future. Your banker quotes you the following USD/EUR forward rate: FUSD/EUR 1.22. will you enter the actual forward contract or set up a synthetic forward position? Problem 9: Assume you want a short position in AUD in a 1-Year USD/AUD contract. You calculate the synthetic forward at USD/AUD-0.85 and your banker quotes you F'sD/AUD-0 actual forward contract or the synthetic forward? Problem 10: Compute the mark-to-market value of the following short forward NZD (New Zealand Dollar) contract. The size of the short position is NZD 450,000 and the forward rate is 2.the current spot rate (at time of valuation) XUSD/NZD = 0.64 . The NZD and USD interest rates are: rNZD- 9% and ruso = 396; assume the contract matures in two years from now (so at t-2)

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