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1. 2. 3. Use the information below to answer the questions that follow. Switzerland franc Denmark krone Norway Krone Australia dollar Canada dollar U.S. $

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Use the information below to answer the questions that follow. Switzerland franc Denmark krone Norway Krone Australia dollar Canada dollar U.S. $ EQUIVALENT CURRENCY PER U.S. $ 0.8008 1.2488 0.164 6.0976 0.1462 6.8399 0.7002 1.4282 0.7425 1.3468 Required: (a) If you have $7, how many Switzerland francs can you get? SF8.74 (b) How much is one Switzerland franc worth? $0.8408 (c) If you have 6 million Switzerland francs, how many dollars do you have? $4,564,560 (d) How many Denmark krones can you get for a Switzerland franc? 5.1272 krones (e) What is the rate of the most valuable currency listed? $0.832832 (f) What is the rate of the least valuable currency listed? $0.13889 Use the information below to answer the following questions. U.K. Pound 6-months forward () Japan Yen 6-months forward () Switzerland Franc 6-months forward (SF) Currency per U.S. $ 0.5135 0.5204 108.21 106.96 1.0492 1.0478 Suppose interest rate parity holds, and the current six-month risk-free rate in the United States is 5.9 percent. Required: (a) What must the six-month risk-free rate be in Great Britain? 4.57% (b) What must the six-month risk-free rate be in Japan? 7.06% (c) What must the six-month risk-free rate be in Switzerland? 6% Suppose the current exchange rate for the Polish zloty is Z 2.31. The expected exchange rate in three years is Z 2.62. What is the difference in the annual inflation rates for the United States and Poland over this period? Assume that the anticipated rate is constant for both countries. Multiple Choice 6.22% O 4.27% O 7.93% O 7.07% O 4.29%

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