1. A foreign exchange trader with a U.S. bank took a short position of 7,547,101 when the $/ exchange rate was 1.63. Subsequently, the exchange rate has changed to 1.72. Compute the profit (or loss) of the short position. (Note, if it is profit, e.g., by $2000, just enter "2000". If it is a loss, of $2000, just enter "-2000". In other words, a positive number means "increase", a negative number indicates decrease. There is no need to use "$" before your answer. Additionally, please round your number to the nearest integer, no decimals needed)

2. A bank is quoting the following exchange rates against the dollar for the Swiss franc and the Australian dollar:

SFr/$ = 1.5960--70

A$/$ = 1.7225--35

An Australian firm asks the bank for an A$/SFr quote. The cross-rate for an A$/SFr bid is ______ , and for an A$/SFr ask is______ . (keep four decimals, such as 1.1234)

3.Assume you are a trader with Deutsche Bank. From the quote screen on your computer terminal, you notice that Dresdner Bank is quoting 0.7627/$1.00 and Credit Suisse is offering SF1.1806/$1.00. You learn that UBS is making a direct market between the Swiss franc and the euro, with a current /SF quote of .6395. Show how you can make a triangular arbitrage profit by trading at these prices. (Ignore bid-ask spreads for this problem. Assume that you have $5,000,000 with which to conduct the arbitrage)

(Please enter your answer in the format: e.g., buy $50,000 or sell 25,000)

Step1: (e.g., buy $50,000 or sell 25,000 )

Step2: (e.g., buy $50,000 or sell 25,000 )

Step3: (e.g., buy $50,000 or sell 25,000 )

Step4: total profit or loss is (just the amount with currency sign, e.g., "$5,000" for a profit or "-$5,000" for a loss

4.If the exchange between Euro and U.S. dollar is $1.214 per euro, and the exchange rate between Switzerland franc (SF) and U.S dollar is $1.164 per SF. Compute the cross rate of euro/SF(please keep for decimals, e.g., 0.0004).

5. If the exchange between Euro and U.S. dollar is $1.374 per euro, and the exchange rate between Switzerland franc (SF) and U.S dollar is $1.183 per SF. Compute the cross rate of SF/euro (please keep for decimals, e.g., 0.0004).