1. From Jan 2008 to Jan 2009 the British pound to U. S. dollar exchange rate increased from 1.9702 pounds per dollar to 1.4462 pounds per dollar. A U. S. based investor buys a one-year pound denominated bond for $2,000 in Jan 2008. One year later the bond provides 4% rate of return in yen. What is the rate of return in dollars?

2. From Jan 2008 to Jan 2009 the Japanese yen to U. S. dollar exchange rate decreased from 107.81 yen per dollar to 90.12 yen per dollar. Which one of the following statements describes this change?

A.) U. S. dollar appreciated against the yen by approximately 16%

b.) U. S. dollar appreciated against the yen by approximately 19%

c.) U. S. dollar depreciated against the yen by approximately 19%.

d.)U. S. dollar depreciated against the yen by approximately 16%

3. From Jan 2008 to Jan 2009 the Japanese yen to U. S. dollar exchange rate decreased from 107.81 yen per dollar to 90.12 yen per dollar. A U. S. based investor buys a one year yen denominated bond for $2,000 in Jan 2008. One year later the bond provides 1% rate of return in yen. What is the rate of return in dollars?

4.The Australian dollar increased from US $ 0.66 to US $ 1.03 per Australian dollar over the four year period of Feb 2009 to Feb 2013. What is the annualized rate of appreciation?

5. The euro to dollar changed from 1.38 dollars per euro in Feb 2014 to 1.13 dollars per euro in Fen 2019. What is the approximate annualized rate of depreciation over this five year period?

6. The Australian dollars are trading at 1 Australian dollar to US $0.80. The interest rate in U. S. and Australia are 1% and 2% per annum. If the Australian dollar drops to U. S. $0.75 per Australian dollar over a year. Which one of the following would have been a more profitable investment?

A.) A one-year bond denominated in Australian dollars

b.) A one-year bond denominated in U. S. dollars.

7. The one-year interest rate is 3% in the U. S. and 1% in Germany. The dollar to euro exchange rate is currently at $1.20 per euro. If the euro appreciates by 4% against the dollar over the year .Which one of the following would have been more profitable?

a.) A one-year bond denominated in euros.

b.) A one-year bond denominated in dollars.

8. ) If the interest rates in the US and UK are 1% and 2% respectively the pound will have to ______ against the dollar in order for investments in US bonds and UK to provide equal rates of return for a US based investor

A.) Depreciate

B.) Appreciate

9. ) A bank quotes $1.30 per pound for a spot transaction and 1.31 for a one month forward transaction. The payment for the forward contract takes place:

A.) Today

B.) One month later