Q15. The annual interest rate is 8.02% in Mexico and 7.45% in Canada. The spot peso-dollar exchange rate is 569.87 MXN/CAD, and the one-year forward rate is 526.78 MXN/CAD. If an arbitrage opportunity exists, how much would a person living in Mexico make borrowing 15,000,000 pesos or the equivalent in Canadian dollars? A) 1,292,410 pesos. B) 1,304,207 pesos. C) 1,284,230 pesos.
Q16. The annual interest rates in England and New Zealand are 6.54% and 7.03%, respectively. The one-year forward exchange rate between the British pound and the New Zealand dollar is 0.45 GBP/NZD and the spot rate is 0.41 GBP/NZD. If a person living in London can borrow 10,000 pounds or the equivalent amount in New Zealand dollars, how much arbitrage profit, if any, can he make? A) 1,093.20 GBP. B) 1,043.61 GBP. C) 1,124.88 GBP.
Q17. The forward rate between the Mexican peso and the U.S. dollar is 556.75 MXN/USD and the spot rate is 581.23 MXN/USD. The Mexican interest rate is 5.89%, and the U.S. rate is 5.75%. If a person lives in Mexico and can borrow $10,000 or the equivalent in pesos, how much can she make if currency arbitrage opportunities exist? A) $479.59. B) $459.39. C) Arbitrage opportunities do not exist.
Q18. The spot rate between the Canadian dollar and the British pound is 1.265 CAD/₤ and the forward rate is 1.193 CAD/₤. The interest rate in Canada and England are 6.13% and 6.01%, respectively. A person living in Toronto, Canada can borrow either Canadian dollars or pounds. If an arbitrage opportunity exists, which currency would they lend or borrow? A) Borrow pounds. B) Lend pounds. C) Borrow Canadian dollars.
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发表于 2009-1-13 13:47
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