a) Find the profit a dealer earns in the following foreign exchange rate (FX) quotations when transactions take place in these currencies. GBP/EUR 1.11-14 GBP/CHF 1.25-29 GBP/USD 1.26-28 Note: Use two (2) decimal places in all your calculations. GBP: Britain Pound USD: United States Dollar EUR: Euro CHF: Swiss Franc b) Based on the following FX quotations, find the exchange rate of Euro in Yen. USD/JPY 113.35-45 EUR/USD 1.12-14 Note: Use two (2) decimal places in all your calculations. USD: United States Dollar JPY: Japanese Yen EUR: Euro c) Sanga Co. is a U.S. firm producing racing swimming goggles in Greece at a total cost of 6 per unit and sells them in Japan. Based on the mean exchange rate quotations provided under part (b), find the selling price per unit (in JPY) when the goggles are sold from Greece to Japan given that the firm makes a profit of $25.72 per unit sold. Note: Use two (2) decimal places in all your calculations. d) Ariadne left her home country Brazil with more than BRL5,000 (Brazilian Real) and went to Russia by visiting first London, then Athens and finally Moscow. Assuming she spent BRL5,000 in Moscow, what was the equivalent amount on Russian Ruble (RUB)? Note: Round all your calculation(s) to the nearest integer. BRL/GBP 0.2040-45 GBP/EUR 1.1157-63 EUR/RUB 75.2680-85 e) Explain whether (or not) there is a link between covered interest arbitrage and the interest rate parity. a) Find the profit a dealer earns in the following foreign exchange rate (FX) quotations when transactions take place in these currencies. GBP/EUR 1.11-14 GBP/CHF 1.25-29 GBP/USD 1.26-28 Note: Use two (2) decimal places in all your calculations. GBP: Britain Pound USD: United States Dollar EUR: Euro CHF: Swiss Franc b) Based on the following FX quotations, find the exchange rate of Euro in Yen. USD/JPY 113.35-45 EUR/USD 1.12-14 Note: Use two (2) decimal places in all your calculations. USD: United States Dollar JPY: Japanese Yen EUR: Euro c) Sanga Co. is a U.S. firm producing racing swimming goggles in Greece at a total cost of 6 per unit and sells them in Japan. Based on the mean exchange rate quotations provided under part (b), find the selling price per unit (in JPY) when the goggles are sold from Greece to Japan given that the firm makes a profit of $25.72 per unit sold. Note: Use two (2) decimal places in all your calculations. d) Ariadne left her home country Brazil with more than BRL5,000 (Brazilian Real) and went to Russia by visiting first London, then Athens and finally Moscow. Assuming she spent BRL5,000 in Moscow, what was the equivalent amount on Russian Ruble (RUB)? Note: Round all your calculation(s) to the nearest integer. BRL/GBP 0.2040-45 GBP/EUR 1.1157-63 EUR/RUB 75.2680-85 e) Explain whether (or not) there is a link between covered interest arbitrage and the interest rate parity
