19-1,2,3

PROBLEMS 19-1 19-2 the main EXCHANGE RATE If one Korean won sells for $0.00092 (U.S.), what should dollars sell for in Korean won per dollar? CROSS RATE A currency trader observes that in the spot exchange market, 1 U.S. dollar can be exchanged for 3.50 Israeli shekels or for 93 Japanese yen. What is the cross-exchange rate between the yen and the shekel; that is, how many yen would you receive for every shekel exchanged? INTEREST RATE PARITY Six-month T-bills have a nominal rate of 4%, while default-free Japanese bonds that mature in 6 months have a nominal rate of 2.5% In the spot exchange market, 1 yen equals $0.013. If interest rate parity holds, what is the 6-month forward exchange rate? 19-3