1. Use the following information to answer the next two questions.

Suppose the spot quotes for the pound sterling and Mexican peso are $1.398189 and $.113033, respectively. What are the bid and ask quotes for pounds in terms of pesos? Round intermediate calculations to four decimal places.

		12.3398; 12.3796
		12.3469; 12.3726
		.080812
		.097687

2. Find the ask quote for dollars in terms of pounds. Round intermediate steps to four decimals.

		.9994
		.7153
		.7148
		.8158

3. Suppose a dealer's euro quote is $1.31150. How many euros would you receive in exchange for 500,000 dollars, rounded to the nearest euro?

		655,500
		381,388
		370,370
		675,000

4. Suppose a banker observed the following direct spot quotations for dollars and euros.

Bank X: $1.1029-.32

Bank Y: $1.1034-.35

Find the abritrage profit available (in terms of dollars) to a banker with 2 million dollars at her disposal.

		543.87
		400
		362.58
		255.16

5. Assume that a bank's quote for the peso is $.1133-71. Find the percentage bid-ask spread.

		.0123
		.0325
		.0355
		.0483

6. Suppose that a Japanese importer agrees to purchase raw materials from Canada. The importer agrees to purchase the raw materials for C$650,000. The importer's bank provides the following qoutes for Canadian dollars: = C$.0085-.0091. How many yen will the importer pay to get the Canadian dollars needed to purchase his raw materials?

		67,094,198.22
		76,470,588.24
		81,293,092.10
		71,428,571.43