Table 1. Dollar Spot Forward Against the Dollar High 0.0 DOLLAR SPOT FORWARD AGAINST THE DOLLAR Closing Change Bid/offer Day's mid One month Three month One year J.P. Morgan Dec 31 mid-point on day spread Low Rate %PA Rate %PA Rate %PA Index Europe Czech Rep. (Koruna) 22.9040 0.0983 888-192 22.9192 22.7210 22.8930 0.6 22.8763 0.5 22.7380 0.7 Denmark (Danish Krone) 6.1538 0.0333 525-550 6.1552 6.1192 6.1518 0.4 6.1486 0.3 6.1196 0.6 Hungary (Forint) 260.940 2.0305 263-530 261.540 258.230 261.195 -1.2 261.620 -1.0 263.340 -0.9 Norway (Nor. Krone) 7.4976 0.0870 932-019 7.5013 7.3840 7.5041 -1.0 7.5172 -1.0 7.5387 -0.5 Poland (Zloty) 3.5520 0.0256 504-536 3.5530 3.5000 3.5571 1.7 3.5663 -1.6 3.5897 1.1 Russia (Rouble) 60.0000 4.3330 500-500 60.5600 55.2900 61.1600 -22.8 63.2790-20.7 69.7325-14.0 Sweden (Krona) 7.8283 0.0777 241-324 7.8442 7.6964 7.8275 0.1 7.8256 0.1 7.8015 0.3 Switzerland (Fr) 0.9937 0.0051 934-939 0.9938 0.9877 0.9932 0.6 0.9919 0.7 0.9840 1.0 Turkey (New Lira) 2.3378 0.0127 372-383 2.3380 2.3200 2.3550 -8.8 2.3846 -7.9 2.5269 -7.5 UK () 1.5593 0.0032 590-595 1.5619 1.5547 1.5589 0.3 1.5581 0.3 1.5562 0.2 Euro (Euro) 1.2101 -0.0064 099-102 1.2170 1.2096 1.2105 -0.4 1.2111 -0.3 1.2165 -0.5 SDR (SDR) 0.6917 0.0013 Americas Argentina (Peso) 8.4645 -0.0860 635-655 8.4655 8.8150 -47.7 9.3350-37.3 11.9810-29.4 Brazil (Real) 2.6582 -0.0056 572-592 2.6592 2.6792 -9.4 2.7261-10.0 2.9417 .9.6 Canada (Canadian $) 1.1583 -0.0022 581-584 1.1615 1.1563 1.1590 -0.8 1.1606 -0.8 1.1671 -0.8 95.5 Mexico (Mexican Peso) 14.7398 0.0063 379-416 14.7690 14.6910 14.7675 -2.3 14.8234 2.3 15.0930 -2.3 122.3 Peru (New Sol) 2.9765 -0.0115 750-780 2.9935 2.9740 3.0000 -9.4 3.0375 -8.0 3.1411 -5.2 USA (US$) 81.4000 -0.0 Pacific/Middle East/Africa Australia (A$) 1.2220 0.0021 217-222 1.2222 1.2217 1.2247 2.7 1.2301 -2.6 1.2035 1.5 127.0 Hong Kong (HK$) 7.7549 -0.0023 543-554 7.7581 7.7535 7.7551 0.0 7.7551 0.0 7.7554 0.0 85.1 India (Indian Rupee) 63.1225 -0.2625 150-300 63.3850 63.0300 63.5375 -7.8 64.3525 -7.6 67.4425 -6.4 Indonesia (Rupiah) 12385.0-61.5000000-000 12450.0 12350.0 12452.5 -6.5 12590.0 -6.5 13235.0 -6.4 (Rial) 13569.0 -0.5000000-000 0.0 Israel (Shekel) 3.8915 -0.0011 896-933 3.9035 3.8746 3.8914 0.0 3.8895 0.2 3.8741 0.4 Japan (Yen) 119.895 0.5200 880-910 119.930 119.220 119.864 0.3 119.792 0.3 119.174 0.6 90.7 Kuwait (Kuwaiti Dinar) 0.2929 0.0003 928-930 0.2930 0.2921 0.2930 0.2 0.2931 0.3 0.2940 -0.4 Malaysia (Ringgit) 3.4965 -0.0020 950-980 3.4980 3.4890 3.5052 -3.0 3.5228 -3.0 3.5835 -2.4 New Zealand (NZ$) 1.2794 0.0051 791-798 0.7818 0.7814 1.2837 -4.0 1.2909 -3.5 1.3241 -3.4 108.9 Philippines (Peso) 44.7325 250-400 44.7750 44.7250 44.8025 -1.9 44.9075 -1.6 45.3875 -1.4 Saudi Arabia (Riyal) 3.7525 -0.0002 522-527 3.7532 3.7515 3.7522 0.1 3.7522 0.0 3.7572 -0.1 Singapore ($) 1.3251 0.0040 248-254 1.3254 1.3194 1.3262.1.0 1.3270 -0.6 1.3290 -0.3 85.2 South Africa (Rand) 11.5688 0.0135 637-738 11.5962 11.5330 11.6259 -5.9 11.7457 -6.0 12.3182 -6.1 Korea South (Won) 1099.15 900-930 1099.30 1086.67 1100.95 -2.0 1103.70 -1.6 1109.95 -1.0 142.2 Taiwan ($) 31.6020 -0.1225 000-040 31.7200 31.5300 31.5980 0.2 31.5800 0.3 31.3660 0.8 Thailand (Baht) 32.9000 900-100 32.9700 32.8000 32.9538 -2.0 33.0415 -1.7 33.3350 -1.3 UAE (Dirham) 3.6730 -0.0001 729-731 3.6730 3.6720 3.6729 0.0 3.6729 0.0 3.6743 0.0 *The closing mid-point rates for the Euro and are shown in brackets. The other figures in both rows are in the reciprocal form in line with market convention. Official rates set by Malaysian Government. The WM/Reuters rate for the valuation of capital assets in 2.80 MYR/USD. Bid/offer spreads in the Dollar Spot table show only the last three decimal places. J.P. Morgan nominal indices: Base average 2000 = 100. Bid, offer, mid spot rates and forward rates in both this and the pound table are derived from the WM/Reuters 4pm (London time) CLOSING SPOT and FORWARD RATE services. Some values are rounded by the F.T. Iran Dec 31 Short 7 days One Three Six One term notice month month month year Euro 0.04 - -0.02 0.02 - -0.08 0.06 -0.01 0.12 -0.07 0.18 -0.08 0.42 -0.32 Danish Krone 0.10--0.10 0.26 -0.01 0.21--0.04 0.22--0.08 0.28--0.02 0.44 -0.14 Sterling 0.55 -0.35 0.58 -0.48 0.65 -0.40 0.75 -0.45 0.85 -0.50 1.10 - 0.75 Swiss Franc 0.10 - -0.20 0.20--0.30 -0.05--0.35 -0.09--0.39 0.03 - -0.07 0.12--0.18 Canadian Dollar 1.20 - 0.85 1.05 -0.90 1.15 -1.00 1.26 - 1.11 1.38 - 1.23 1.67 - 1.52 US Dollar 0.25 -0.10 0.13 -0.03 0.40 -0.22 0.24 - 0.14 0.60 - 0.40 0.87 -0.77 Japanese Yen 0.22--0.02 0.03 - -0.17 0.08--0.12 0.11 - -0.02 0.15--0.02 0.27 - 0.02 Singapore $ 0.40 -0.30 0.44 -0.19 0.43 -0.25 0.47 -0.28 0.56 -0.31 0.72 - 0.53 Source: Reuters. Short term rates are call for the US Dollar and Yen, others: two day's notice. - BONDS - HIGH YIELD & EMERGING MARKET Day's Mth's Spread Red Ratings Bid Bid chge chge VS Dec 31 date Coupon S* M* F* price yield yield yield US High Yield US$ Bertin 10/16 10.25 BB Ba3 0 109.34 4.62 -0.06 0.79 3.94 High Yield Euro Kazkommerts Int 02/17 6.88 B Caal B 90.00 12.54 0.04 5.05 12.64 Emerging US$ Bulgaria 01/15 8.25 BB+ Baa2 BBB- 100.10 4.32 0.13 2.15 4.35 Peru 02/15 9.88 BBB+ A3 BBB+ 100.74 0.93 -0.04 1.54 0.89 Brazil 03/15 7.88 BBB- Baa2 BBB 101.33 0.04 -1.08 -0.52 -0.01 Mexico 09/16 11.38 BBB+ A3 BBB+ 117.63 0.86 -0.12 -0.04 0.19 Philippines 01/19 9.88 BBB Baa2 BBB- 130.56 1.94 -0.02 -0.14 0.28 Brazil 01/20 12.75 BBB- Baa2 BBB 144.00 3.20 -0.02 0.21 1.55 Colombia 02/20 11.75 BBB Baa2 BBB 140.24 3.19 -0.01 0.26 1.52 Russia 03/30 7.50 BBB- Baa2 BBB 103.25 6.72 0.26 1.40 5.07 Mexico 08/31 8.30 BBB+ A3 BBB+ 149.33 4.16 -0.05 -0.03 1.99 Indonesia 02/37 6.63 BB+ Baa3 BBB- 116.91 5.32 0.01 0.14 2.57 Emerging Euro Brazil 02/15 7.38 BBB- Baa2 BBB 100.31 3.62 0.14 2.36 3.82 Poland 02/16 3.63 A- A2 A- 103.50 0.35 -0.22 -0.10 0.43 Turkey 03/16 5.00 NR Baa3 BBB- 104.90 0.71 -0.25 -0.28 0.78 Mexico 02/20 5.50 BBB+ A3 BBB+ 119.77 1.46 -0.06 0.06 1.45 US $ denominated bonds NY close; all other London close. *S - Standard & Poor's, M - Moody's, F - Fitch. Source: Thomson Reuters Question 1 (1 point) On April 14, 2021, the British pound traded at 1.3757, while on December 31, 2014 the exchange rate was 1.5593 (see Table 1). By how much did the pound appreciate/depreciate against the dollar during the period in question? a) The pound depreciated by 11.77% b) The pound depreciated by 13.35% c) The pound appreciated by 11.77% d) The pound appreciated by 13.35% Question 2 (1 point) Suppose Ragnetto LLC charges 2.5 for a cricket burger in Milan. If the euro appreciates from $1.27 to $1.4/, what price will Ragnetto LLC have to charge for its cricket burgers to maintain its per-unit dollar revenue? a) 2.5 b) 4.2 c) 3 Od d) 2.14 Question 3 (1 point) Based on the information in Table 1, at what price can we sell 1 Norwegian krone (NOK)? a) USD 7.4976/NOK b) USD 0.1333/NOK OC) USD 7.4019/NOK d) USD 0.1351/NOK e) USD 0.1335/NOK f) USD 7.4932/NOK Question 4 (1 point) The spot rate and the 1-year forward rate on the Korean Won are KRW 1199.15/USD and KRW 1109.95/USD, respectively. Your company, a U.S. exporter sells KRW 15,000,000 in the forward market to fully hedge its transaction exposure. Assuming the spot rate changes to KRW 1000/USD, your company would: a) be happy to have sold Korean Won forward b) receive nothing c) receive less than KRW 15,000,000 in 1 year d) receive more than KRW 15,000,000 in 1 year Oe) have been better off not to have sold Korean Won forward Question 5 (1 point) Nissan, a Japanese multinational automobile manufacturer, exports a substantial fraction of its output to the Euro-zone. What financial measures would be suitable for Nissan to take to reduce its currency risk? a) sell yen forward in the amount of its annual shipments to the Euro-zone Ob) borrow euros to finance part of its operations c) buy euros forward d) borrow dollars to finance part of its operations e) borrow yen to finance its operations Question 6 (1 point) Draculina LLC, a US-based multinational, imports cat toys from China and resells them in the U.S. Imports are invoiced in Chinese Yuan, and sales are invoiced in U.S. dollars. How would an appreciation of the dollar affect Draculina's value? a) Draculina's value should increase. Ob) Draculina's value should drop. c) Draculina's value is unlikely to be affected as long as Draculina does not increase sale prices in the U.S. Table 1. Dollar Spot Forward Against the Dollar High 0.0 DOLLAR SPOT FORWARD AGAINST THE DOLLAR Closing Change Bid/offer Day's mid One month Three month One year J.P. Morgan Dec 31 mid-point on day spread Low Rate %PA Rate %PA Rate %PA Index Europe Czech Rep. (Koruna) 22.9040 0.0983 888-192 22.9192 22.7210 22.8930 0.6 22.8763 0.5 22.7380 0.7 Denmark (Danish Krone) 6.1538 0.0333 525-550 6.1552 6.1192 6.1518 0.4 6.1486 0.3 6.1196 0.6 Hungary (Forint) 260.940 2.0305 263-530 261.540 258.230 261.195 -1.2 261.620 -1.0 263.340 -0.9 Norway (Nor. Krone) 7.4976 0.0870 932-019 7.5013 7.3840 7.5041 -1.0 7.5172 -1.0 7.5387 -0.5 Poland (Zloty) 3.5520 0.0256 504-536 3.5530 3.5000 3.5571 1.7 3.5663 -1.6 3.5897 1.1 Russia (Rouble) 60.0000 4.3330 500-500 60.5600 55.2900 61.1600 -22.8 63.2790-20.7 69.7325-14.0 Sweden (Krona) 7.8283 0.0777 241-324 7.8442 7.6964 7.8275 0.1 7.8256 0.1 7.8015 0.3 Switzerland (Fr) 0.9937 0.0051 934-939 0.9938 0.9877 0.9932 0.6 0.9919 0.7 0.9840 1.0 Turkey (New Lira) 2.3378 0.0127 372-383 2.3380 2.3200 2.3550 -8.8 2.3846 -7.9 2.5269 -7.5 UK () 1.5593 0.0032 590-595 1.5619 1.5547 1.5589 0.3 1.5581 0.3 1.5562 0.2 Euro (Euro) 1.2101 -0.0064 099-102 1.2170 1.2096 1.2105 -0.4 1.2111 -0.3 1.2165 -0.5 SDR (SDR) 0.6917 0.0013 Americas Argentina (Peso) 8.4645 -0.0860 635-655 8.4655 8.8150 -47.7 9.3350-37.3 11.9810-29.4 Brazil (Real) 2.6582 -0.0056 572-592 2.6592 2.6792 -9.4 2.7261-10.0 2.9417 .9.6 Canada (Canadian $) 1.1583 -0.0022 581-584 1.1615 1.1563 1.1590 -0.8 1.1606 -0.8 1.1671 -0.8 95.5 Mexico (Mexican Peso) 14.7398 0.0063 379-416 14.7690 14.6910 14.7675 -2.3 14.8234 2.3 15.0930 -2.3 122.3 Peru (New Sol) 2.9765 -0.0115 750-780 2.9935 2.9740 3.0000 -9.4 3.0375 -8.0 3.1411 -5.2 USA (US$) 81.4000 -0.0 Pacific/Middle East/Africa Australia (A$) 1.2220 0.0021 217-222 1.2222 1.2217 1.2247 2.7 1.2301 -2.6 1.2035 1.5 127.0 Hong Kong (HK$) 7.7549 -0.0023 543-554 7.7581 7.7535 7.7551 0.0 7.7551 0.0 7.7554 0.0 85.1 India (Indian Rupee) 63.1225 -0.2625 150-300 63.3850 63.0300 63.5375 -7.8 64.3525 -7.6 67.4425 -6.4 Indonesia (Rupiah) 12385.0-61.5000000-000 12450.0 12350.0 12452.5 -6.5 12590.0 -6.5 13235.0 -6.4 (Rial) 13569.0 -0.5000000-000 0.0 Israel (Shekel) 3.8915 -0.0011 896-933 3.9035 3.8746 3.8914 0.0 3.8895 0.2 3.8741 0.4 Japan (Yen) 119.895 0.5200 880-910 119.930 119.220 119.864 0.3 119.792 0.3 119.174 0.6 90.7 Kuwait (Kuwaiti Dinar) 0.2929 0.0003 928-930 0.2930 0.2921 0.2930 0.2 0.2931 0.3 0.2940 -0.4 Malaysia (Ringgit) 3.4965 -0.0020 950-980 3.4980 3.4890 3.5052 -3.0 3.5228 -3.0 3.5835 -2.4 New Zealand (NZ$) 1.2794 0.0051 791-798 0.7818 0.7814 1.2837 -4.0 1.2909 -3.5 1.3241 -3.4 108.9 Philippines (Peso) 44.7325 250-400 44.7750 44.7250 44.8025 -1.9 44.9075 -1.6 45.3875 -1.4 Saudi Arabia (Riyal) 3.7525 -0.0002 522-527 3.7532 3.7515 3.7522 0.1 3.7522 0.0 3.7572 -0.1 Singapore ($) 1.3251 0.0040 248-254 1.3254 1.3194 1.3262.1.0 1.3270 -0.6 1.3290 -0.3 85.2 South Africa (Rand) 11.5688 0.0135 637-738 11.5962 11.5330 11.6259 -5.9 11.7457 -6.0 12.3182 -6.1 Korea South (Won) 1099.15 900-930 1099.30 1086.67 1100.95 -2.0 1103.70 -1.6 1109.95 -1.0 142.2 Taiwan ($) 31.6020 -0.1225 000-040 31.7200 31.5300 31.5980 0.2 31.5800 0.3 31.3660 0.8 Thailand (Baht) 32.9000 900-100 32.9700 32.8000 32.9538 -2.0 33.0415 -1.7 33.3350 -1.3 UAE (Dirham) 3.6730 -0.0001 729-731 3.6730 3.6720 3.6729 0.0 3.6729 0.0 3.6743 0.0 *The closing mid-point rates for the Euro and are shown in brackets. The other figures in both rows are in the reciprocal form in line with market convention. Official rates set by Malaysian Government. The WM/Reuters rate for the valuation of capital assets in 2.80 MYR/USD. Bid/offer spreads in the Dollar Spot table show only the last three decimal places. J.P. Morgan nominal indices: Base average 2000 = 100. Bid, offer, mid spot rates and forward rates in both this and the pound table are derived from the WM/Reuters 4pm (London time) CLOSING SPOT and FORWARD RATE services. Some values are rounded by the F.T. Iran Dec 31 Short 7 days One Three Six One term notice month month month year Euro 0.04 - -0.02 0.02 - -0.08 0.06 -0.01 0.12 -0.07 0.18 -0.08 0.42 -0.32 Danish Krone 0.10--0.10 0.26 -0.01 0.21--0.04 0.22--0.08 0.28--0.02 0.44 -0.14 Sterling 0.55 -0.35 0.58 -0.48 0.65 -0.40 0.75 -0.45 0.85 -0.50 1.10 - 0.75 Swiss Franc 0.10 - -0.20 0.20--0.30 -0.05--0.35 -0.09--0.39 0.03 - -0.07 0.12--0.18 Canadian Dollar 1.20 - 0.85 1.05 -0.90 1.15 -1.00 1.26 - 1.11 1.38 - 1.23 1.67 - 1.52 US Dollar 0.25 -0.10 0.13 -0.03 0.40 -0.22 0.24 - 0.14 0.60 - 0.40 0.87 -0.77 Japanese Yen 0.22--0.02 0.03 - -0.17 0.08--0.12 0.11 - -0.02 0.15--0.02 0.27 - 0.02 Singapore $ 0.40 -0.30 0.44 -0.19 0.43 -0.25 0.47 -0.28 0.56 -0.31 0.72 - 0.53 Source: Reuters. Short term rates are call for the US Dollar and Yen, others: two day's notice. - BONDS - HIGH YIELD & EMERGING MARKET Day's Mth's Spread Red Ratings Bid Bid chge chge VS Dec 31 date Coupon S* M* F* price yield yield yield US High Yield US$ Bertin 10/16 10.25 BB Ba3 0 109.34 4.62 -0.06 0.79 3.94 High Yield Euro Kazkommerts Int 02/17 6.88 B Caal B 90.00 12.54 0.04 5.05 12.64 Emerging US$ Bulgaria 01/15 8.25 BB+ Baa2 BBB- 100.10 4.32 0.13 2.15 4.35 Peru 02/15 9.88 BBB+ A3 BBB+ 100.74 0.93 -0.04 1.54 0.89 Brazil 03/15 7.88 BBB- Baa2 BBB 101.33 0.04 -1.08 -0.52 -0.01 Mexico 09/16 11.38 BBB+ A3 BBB+ 117.63 0.86 -0.12 -0.04 0.19 Philippines 01/19 9.88 BBB Baa2 BBB- 130.56 1.94 -0.02 -0.14 0.28 Brazil 01/20 12.75 BBB- Baa2 BBB 144.00 3.20 -0.02 0.21 1.55 Colombia 02/20 11.75 BBB Baa2 BBB 140.24 3.19 -0.01 0.26 1.52 Russia 03/30 7.50 BBB- Baa2 BBB 103.25 6.72 0.26 1.40 5.07 Mexico 08/31 8.30 BBB+ A3 BBB+ 149.33 4.16 -0.05 -0.03 1.99 Indonesia 02/37 6.63 BB+ Baa3 BBB- 116.91 5.32 0.01 0.14 2.57 Emerging Euro Brazil 02/15 7.38 BBB- Baa2 BBB 100.31 3.62 0.14 2.36 3.82 Poland 02/16 3.63 A- A2 A- 103.50 0.35 -0.22 -0.10 0.43 Turkey 03/16 5.00 NR Baa3 BBB- 104.90 0.71 -0.25 -0.28 0.78 Mexico 02/20 5.50 BBB+ A3 BBB+ 119.77 1.46 -0.06 0.06 1.45 US $ denominated bonds NY close; all other London close. *S - Standard & Poor's, M - Moody's, F - Fitch. Source: Thomson Reuters Question 1 (1 point) On April 14, 2021, the British pound traded at 1.3757, while on December 31, 2014 the exchange rate was 1.5593 (see Table 1). By how much did the pound appreciate/depreciate against the dollar during the period in question? a) The pound depreciated by 11.77% b) The pound depreciated by 13.35% c) The pound appreciated by 11.77% d) The pound appreciated by 13.35% Question 2 (1 point) Suppose Ragnetto LLC charges 2.5 for a cricket burger in Milan. If the euro appreciates from $1.27 to $1.4/, what price will Ragnetto LLC have to charge for its cricket burgers to maintain its per-unit dollar revenue? a) 2.5 b) 4.2 c) 3 Od d) 2.14 Question 3 (1 point) Based on the information in Table 1, at what price can we sell 1 Norwegian krone (NOK)? a) USD 7.4976/NOK b) USD 0.1333/NOK OC) USD 7.4019/NOK d) USD 0.1351/NOK e) USD 0.1335/NOK f) USD 7.4932/NOK Question 4 (1 point) The spot rate and the 1-year forward rate on the Korean Won are KRW 1199.15/USD and KRW 1109.95/USD, respectively. Your company, a U.S. exporter sells KRW 15,000,000 in the forward market to fully hedge its transaction exposure. Assuming the spot rate changes to KRW 1000/USD, your company would: a) be happy to have sold Korean Won forward b) receive nothing c) receive less than KRW 15,000,000 in 1 year d) receive more than KRW 15,000,000 in 1 year Oe) have been better off not to have sold Korean Won forward Question 5 (1 point) Nissan, a Japanese multinational automobile manufacturer, exports a substantial fraction of its output to the Euro-zone. What financial measures would be suitable for Nissan to take to reduce its currency risk? a) sell yen forward in the amount of its annual shipments to the Euro-zone Ob) borrow euros to finance part of its operations c) buy euros forward d) borrow dollars to finance part of its operations e) borrow yen to finance its operations Question 6 (1 point) Draculina LLC, a US-based multinational, imports cat toys from China and resells them in the U.S. Imports are invoiced in Chinese Yuan, and sales are invoiced in U.S. dollars. How would an appreciation of the dollar affect Draculina's value? a) Draculina's value should increase. Ob) Draculina's value should drop. c) Draculina's value is unlikely to be affected as long as Draculina does not increase sale prices in the U.S