1) You are interested in buying Swedish krona (SK). Your bank quotes SK7.5050/$ Bid and SK7.5150/$ Ask. What would you pay in dollars if you bought SK 10,000,000 at the current spot rate?

2) The following outright quotations are given for the Canadian dollar:

Assume you reside in the United States. Calculate forward quotes for the Canadian dollar as an annual percentage premium or discount. Would a foreign exchange trader in Canada get a different answer if asked to calculate the annual percentage premium or discount on the U.S. dollar for each forward rate? Why?

3) Calculate appreciation or depreciation in each of the following: a) If the dollar depreciates 10% against the yen, by what percentage rate does the yen appreciate against the dollar? b) If the dollar appreciates 1,000% against the ruble, by what percentage point does the ruble depreciate against the dollar?

4) Suppose that at time t=0 the dollar per yen spot rate S0$/ is 0.0100 $/ and that the yen appreciates 25.86 percent during the next period.

a) What is the closing spot rate in dollars per yen, S1$/? b) By what percentage does the dollar depreciate against the yen?

Spot rate One moth forward Three moths forward Six months forward Bid (CS/S) 1.2340 1.2345 1.2367 1.2382 Ask (CS/S) 1.2350 1.2365 1.2382 1.2397