1. Which of the following would NOT be a major component of official reserve assets held by the US Federal Reserve Bank?

a) Bonds issued by governments of foreign countries

b) IMF-related reserve assets

c) Gold

d) U.S government bond

2.

S = $1.25 per ; F = $1.20 per ; i($) = 1% i() = 3%

The arbitrage profits (in year-end dollars) available per $100 will be _______.

Hint: Borrow the equivalent of $100 in pounds, convert to dollars and invest in dollars.

1) $ 0.85 2) $1.12 3) $2.03 4) $4.17