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Assume the bid rate of a New Zealand dollar is $0.54 while the ask rate is $0.545 at Bank X. Assume the bid rate of the New Zealand dollar is $0.52 while the ask rate is $0.525 at Bank Y. Given this information, what would be your gain if you use $840,000 and execute locational arbitrage? That is, how much will you end up with over and above the $840,000 you started with?

Assume that a bank’s bid rate on Swiss francs is $0.58 and its ask rate is $0.61. Its bid/ask percentage spread is:

Assume that the bank’s bid quote for the Mexican peso is $0.135 and the ask price is $0.140. If you have $93,000, how many Mexican pesos could you purchase?

Assume Poland’s currency (the zloty) is worth $0.26 and the Japanese yen is worth $0.0065. What is the cross rate of the zloty with respect to the yen? That is, how many yen equal a zloty?

Patrick Bank quotes the following for the British pound and the New Zealand dollar: Quoted Bid PriceQuoted Ask PriceValue of a British pound (£) in $$1.58$1.59Value of a New Zealand dollar (NZ$) in $$0.57$0.58Value of a British pound in  New Zealand dollarsNZ$2.69NZ$2.70Assume you have $30,000 to conduct triangular arbitrage. What is your profit from implementing this strategy?

Christine, Inc. is considering a capital budgeting project in Morocco that requires an initial outlay of 3,030,000 Moroccan dirham. The dirham is currently valued at $0.69 and is expected to remain unchanged for the next two years. In the first and second years of operation, the project will generate 4,200,000 dirham in each year. After two years, Christine will terminate the project and the expected salvage value is 6,500,000 dirham. Christine has assigned a discount rate of 16.6%.There is currently no withholding tax on remittances to the U.S., but there is a 39% chance that the Moroccan government will impose a withholding tax of 11% beginning next year.There is a 76.5% chance that the Moroccan government will pay Christine 5,120,000 dirham after two years instead of the 6,500,000 dirham that it expects.Find the NPV of this project if the Moroccan government imposes a withholding tax of 11%, but pays the 6,500,000 dirham salvage value.

Assume that a bank’s bid rate on Swiss francs is $0.54 and its ask rate is $0.58. Its bid/ask percentage spread is:

An MNC is considering establishing a two-year project in New Zealand with a $6,120,000 initial investment. The required rate of return on this project is 14.2 percent. The project is expected to generate cash flows of NZ$3,100,000 in Year 1 and NZ$6,300,000 in Year 2, excluding the salvage value. Assume no taxes and a stable exchange rate of $0.47 per NZ$ over the next two years. All cash flows are remitted to the parent. What is the break-even salvage value (measured in U.S. dollars)?

The one-year forward rate of the British pound is quoted at $1.42, and the spot rate of the British pound is quoted at $1.46. The forward ____ is ____ percent.

Christine, Inc. is considering a capital budgeting project in Morocco that requires an initial outlay of 3,170,000 Moroccan dirham. The dirham is currently valued at $0.59 and is expected to remain unchanged for the next two years. In the first and second years of operation, the project will generate 4,000,000 dirham in each year. After two years, Christine will terminate the project and the expected salvage value is 7,800,000 dirham. Christine has assigned a discount rate of 20.9%.There is currently no withholding tax on remittances to the U.S., but there is a 31% chance that the Moroccan government will impose a withholding tax of 25% beginning next year.There is a 63.5% chance that the Moroccan government will pay Christine 6,420,000 dirham after two years instead of the 7,800,000 dirham that it expects.What is the probability that the Moroccan government will impose a 25% withholding tax and pay a salvage of 7,800,000 dirham?