Call options on CAD with a strike price of USD1.37/CAD are currently trading at a premium of USD2.4/CAD. What net profit can you make if you buy 4 call option contracts today and sell them again in 30 days for USD7.8/CAD?

Assume the option contracts have a size of CAD26000 and a brokerage fee of USD14.2 is payable on each purchase or sale of a contract.

Select one:

a. 561372.80

b. 561486.40

c. 561543.20

d. 561600.00

e. 140371.60

Assume that the Euro (EUR) futures price for September is USD 1.90. Given that 115,000 units are in a Euro futures contract, the seller of Euro futures will receive which of the following?

Select one:

a. EUR 115000

b. EUR 60526

c. USD 60526

d. USD 218500

e. EUR 218500

ABC Corp has subsidiaries in New Zealand and Australia and sells its final goods in Australia for AUD50.602. It wants to transfer intermediate goods from the New Zealand subsidiary to the Australian subsidiary using transfer pricing. ABC believes a transfer price between AUD27.06 and AUD38.966 is acceptable.

Suppose the corporate tax rate is 20.2% in Australia and 34.7% in New Zealand.

If ABC operates rationally, what transfer price would it use for moving goods from New Zealand to Australia?

Select one:

a. 27.060

b. 38.966

c. 50.602

d. 33.013

K-Roo, an Australian trampoline producer, wants to engage in a business opportunity in the UK that requires it to swap out of AUD and into GBP for an amount of GBP16381, for a period of 2 months.

What are the cash flows associated with this swap transaction?

AUD/GBP Spot Rate	60 Days
1.19851.2041	20-16

Select one:

a. AUD 19632.63 outflow now and AUD 19599.87 inflow in 2 months

b. AUD 19632.63 outflow now and AUD 19665.39 inflow in 2 months

c. AUD 19724.36 outflow now and AUD 19665.39 inflow in 2 months

d. AUD 19724.36 outflow now and AUD 19599.87 inflow in 2 months

e. AUD 19724.36 outflow now and AUD 19750.57 inflow in 2 months