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(2) Suppose you are a teacher and now you will set a calculation question for exam based on the three chapters you learned. Please set
(2) Suppose you are a teacher and now you will set a calculation question for exam based on the three chapters you learned. Please set this calculation question and give the right answer for this question.
*A new and different calculation
I need to create a question like in the example picture below. The question need to have and answer.
Suppose that Britain and U.S. interest rates are iUK=0.04 and iUS=0.03 respectively for 90 days, and that the spot exchange rates are $2.00/ while the forward rates are $1.96/. A New York arbitrageur begins with $20 million. Example 3: Suppose you have access to the following three spot exchange rates: $0.01/yen $0.20/krone 25 yen/krone You start with dollars and want to end up with dollars. o a. How would you engage in arbitrage to profit from these three rates? What is the profit for each dollar used initially? o b. As a result of this arbitrage, what is the pressure on the cross-rate between yen and krone? What must the value of the cross-rate be to eliminate the opportunity for triangular arbitrage? . Ex.9. On December 31, a country has the following stocks of international assets and liabilities to foreigners. The country's residents own $30 billion of bonds issued by foreign govemments The country's central bank holds $20 billion of gold and $15 billion of foreign-currency assets as official reserve assets. Foreign firms have invested in production facilities in the country, with the value of their investments currently $40 billion Residents of foreign countries own $25 billion of bonds issued by the country's companies a. What is the value of the country's international investment position? Is the country an international creditor or debtor? b. If the country during the next year runs a surplus in its current account, what will be the impact be on the value of the country's international investment position
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