Assume the bid rate of a Singapore dollar is $.40 while the ask rate is $.41 at Bank X. Assume the bid rate of a Singapore dollar is $.42 while the ask rate is $.425 at Bank Z. Given this information, what would be your gain if you use $1,000,000 and execute locational arbitrage? That is, how much will you end up with over and above the $1,000,000 you started with?
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The IFE theory suggests that foreign currencies with relativ…
The IFE theory suggests that foreign currencies with relatively high interest rates will appreciate because the high nominal interest rates reflect expected inflation.
Assume that the Fed intervenes by exchanging dollars for eur…
Assume that the Fed intervenes by exchanging dollars for euros in the foreign exchange market. This will cause an ____ U.S. dollars and an ____ euros.
Countries that have adopted the euro must agree on a single…
Countries that have adopted the euro must agree on a single ____ policy.
At Cowpens, Daniel Morgan placed his militia
At Cowpens, Daniel Morgan placed his militia
Assume the following information: U.S. deposit rate for…
Assume the following information: U.S. deposit rate for 1 year = 11% U.S. borrowing rate for 1 year = 12% New Zealand deposit rate for 1 year = 8% New Zealand borrowing rate for 1 year = 10% New Zealand dollar forward rate for 1 year = $.40 New Zealand dollar spot rate = $.39 Also assume that a U.S. exporter denominates its New Zealand exports in NZ$ and expects to receive NZ$600,000 in 1 year. You are a consultant for this firm. Using the information above, what will be the approximate value of these exports in 1 year in U.S. dollars given that the firm executes a money market hedge?
Identify this bone (be sure to indicate whether it is the ri…
Identify this bone (be sure to indicate whether it is the right or the left, as well).
Due to ____, market forces should realign the spot rate of a…
Due to ____, market forces should realign the spot rate of a currency among banks.
In a sterilized exchange rate arrangement, a country’s home…
In a sterilized exchange rate arrangement, a country’s home currency value is pegged to a foreign currency or to some unit of account.
Identify the structure marked by the green dot in this model…
Identify the structure marked by the green dot in this model of skin.