Assume that the spot rate of the Euro is $1.31/, the U.S. one-year interest rate is 4%, and the European one-year interest rate is 6%. What should the one-year forward rate of the Euro be?

A.$1.1931/

B.$1.2853/

C.$1.3425/

D.$1.1434/

Mary has $25,000 to invest in a mutual fund with a NAV = $25.

1. Assuming a No load fund, how many shares can Mary purchase?
2. Assuming a front-end load of 5.6%, how many shares can she purchase?

A.A. 1,000 shares

B. 944 shares

B.A. 944 shares

B. 944 shares

C.A. 944 shares

B. 1,000 shares

D.A. 1,000 shares

B. 1,000 shares

ssume that the U.S. Dollar/British Pound exchange rate is $2.00/1.0 at a New York dealer. Also, assume that at the same time a London dealer has the exchange rate at $1.92/1.0. What would be the profit (in pounds) of a trader who starts with 120,000 British Pounds to exploit this discrepancy?

A.125,000

B.5,750

C.4,750

D.5,000

The 1-year forward exchange rate between the U.S. Dollar and the Euro is $1.3125/ and the forward discount for the Euro is 5%. What is the spot exchange rate?

A.$1.3215/

B.$1.2816/

C.$1.3116/

D.$1.3816/

Ralph invests $50,000 in a load mutual fund for two years. The load fee entails an up-front commission charge of 4.0 percent of the amount invested and is deducted from the original funds invested. In addition, annual fund operating expenses (or 12b-1 fees) are 0.80 percent. The annual fees are charged on the average net asset value invested in the fund and are recorded at the end of each year. Investments in the fund return 3 percent each year paid on the last day of the year. If the investor reinvests the annual returns paid on the investment, calculate the annual return on the mutual funds over the two-year investment period.

A.0.1414%

B.0.1234%

C.0.1324%

D.0.1224%