# 1 You exchange USD 100,00 into Hong Kong dollars today at HKD7.8 = USD1, earn 7% on your Hong Kong investment, and exchange back into US dollars at a rate of HKD8.0 = USD1. How much wealthier are you as a result? 1. $2,600 2. $4,325 3. $6,000 4. $9.744

# 2 Today, you purchased 125,000 yen 6-months forward at JPY130 + USD1 per dollar. The spot rate today is JPY128 = USD1. If the yen appreciates by 10% over the next six months, how many dollars much you pay to acquire to 125,000 yen? 1. $0 2. $961.54 3. $976.56 4. $1,085.07

# 3 Assume the spot exchange rate for the Swiss franc is CHF0.90 = USD1 and the 1-year forward rate is CHF0.871 = USD1. If the 1-year interest rate in the US is 5%, what Is the 1-yeasr interest rate in Switzerland? 1. 2.00% 2. 1.62% 3. 1.50% 4. 1.33%

# 4. An investor purchased a share of stock for $42 and at the same time paid $2 to purchase a put option on the stock with an exercise price of $40. What is her profit or loss if the stock Is worth $30 at expiration? 1. $6 2. -$6 3. -$4 4. $4