7&9

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QUESTION 7 You observe the following three exchange rate quotes from three different banks. Bank A $1.25 = 1 pound Bank B 110 yen = $1 Bank C 135 yen = 1 pound Which of the following steps would be taken to make an arbitrage profit? 1. Sell $ for pounds at Bank A II. Sell $ for yen at Bank B III. Sell yen for pounds at Bank C O I and III O I only O ll only Oll and III O I and II QUESTION 9 You entered into a short position on a CME futures contract on 125.000 euros at the days opening price of 1.200 per euro. Your marginwas $6,500 and your maintenance margin is $4.500. At what settle price will you get a margin call? 51.180 per euro 51.184 per euro $1.220 per euro 51.216 per euro $1.188 per euro