Question: put 6 for all x! for example: if it is 2x35$ then you will calculate as a 2635$ 3. By using the below mentioned quotes,

put 6 for all x!

for example: if it is 2x35$ then you will calculate as a 2635$

3. By using the below mentioned quotes, calculate whether the market trader with $1000000 can make an arbitrage profit or not. If yes, how much is the arbitrage profit? (25 pts) Banks Bid 6. BNP Paribas $16162/ $1.61x6/ Ask 1.28x5/ Bank of Scotland Societe Generale 1.28X3/ 6 S1.26x4/ $1.26x6/ 6 4. Assume that the export price of a Subaru XV from Japan is 4x00000. The exchange rate is 92.60/8. The forecast rate of inflation in the United States is 3.x% per year and is 1.1% per year in Japan. Use this data to answer the following questions on exchange rate pass through. (25 pts) a. What was the export price for the Subaru XV at the beginning of the year expressed in U.S. dollars? b. Assuming purchasing power parity holds, what should the exchange rate be at the end of the year? c. Assuming 100% pass-through of exchange rate, what will the dollar price of a Subaru XV be at the end of the year? d. Assuming 8x% pass-through, what will the dollar price of a Subaru XV be at the end of the year? put 6 for all x

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