Hi related to my MBA/ Multi international Corp finance, I need your help to get answers for the the attached questions set ( Questions set 1), please

Income Effects on Exchange Rates. Assume that the U.S. income level rises at a much higher rate than does the Canadian income level. Other things being equal, how should this affect the (a) U.S. demand for Canadian dollars, (b) supply of Canadian dollars for sale, and (c) equilibrium value of the Canadian dollar? Increase, increase, may not be affected Increase, may not be affected, increase May not be affected, increase, increase Increase, may not be affected, decrease The correct answer is Why do you think the bid/ask spread is higher for pesos than for currencies of industrialized countries? How does this affect a U.S. firm that does substantial business in Mexico? Complete the paragraph. The bid/ask spread is wider because the banks that provide foreign exchange services are subject to _____ risk. A wider bid/ask spread ______ affects the U.S. firm that does business in Mexico because it ______ the transactions costs associated with conversion of dollars to pesos, or pesos to dollars. More, adversely, increases Less, adversely, increases Less, favorably, decreases More, favorably, decreases The correct answer is Inflation Effects on Exchange Rates. Assume that the U.S. inflation rate becomes high relative to Canadian inflation. Other things being equal, how should this affect the (a) U.S. demand for Canadian dollars, (b) supply of Canadian dollars for sale, and (c) equilibrium value of the Canadian dollar? Increase, decrease, increase Decrease, decrease, increase Increase, increase, decrease Decrease, increase, decrease The correct answer is Impact of Economy on Exchange Rates. Assume that inflation is zero in the United States and in Europe, and will remain at zero. U.S. interest rates are presently the same as in Europe. Assume that the economic growth for the United States is presently similar Europe's. Assume that international capital flows are much larger than international trade flows. Today, there is news that clearly signals economic conditions in Europe will be weakening in the future, while economic conditions in the United States will remain the same. How would the euro's value change today based on this information? The supply of euros to be exchanged for dollars should increase as European investors attempt to benefit from relatively high U.S. interest rates. The supply of euros to be exchanged for dollars should decrease as European investors attempt to benefit from relatively high U.S. interest rates. The supply of euros to be exchanged for dollars should remain the same as European investors attempt to benefit from relatively high U.S. interest rates. The supply of euros to be exchanged for dollars should increase as European investors attempt to benefit from relatively low U.S. interest rates. The correct answer is Speculation. You will use the following scenario to fill in the blanks. Blue Demon Bank expects that the Mexican peso will depreciate against the dollar from its spot rate of $.15 to $.14 in 10 days. The following interbank lending and borrowing rates exist: U.S. dollar Lending Rate: 8.0%. Borrowing Rate: 8.3%. Mexican peso Lending Rate: 8.5%. Borrowing Rate: 8.7%. Assume that Blue Demon Bank has a borrowing capacity of either $10 million or 70 million pesos in the interbank market, depending on which currency it wants to borrow. How could Blue Demon Bank attempt to capitalize on its expectations without using deposited funds? Estimate the profits that could be generated from this strategy. Blue Demon Bank can capitalize on its expectations about pesos (MXP) as follows: Note, Steps 1, 2, and 5 have been completed for you: 1: Borrow MXP70 million 2: Convert the MXP70 million to dollars: MXP70,000,000 $.15 = $10,500,000 3: Lend the dollars through the interbank market at 8.0% annualized over a 10 day period. The amount accumulated in 10 days is:______________ 4: Repay the peso loan. The repayment amount on the peso loan is:_____________ 5: Based on the expected spot rate of $.14, the amount of dollars needed to repay the peso loan is: $9,823,683. 6: After repaying the loan, Blue Demon Bank will have a speculative profit (if its forecasted exchange rate is accurate) of: ________. What are the blanks for questions 3, 4, and 6? $8,452,698, MXP70,169,167, $524,350 $9,452,698, MXP55,780,724, - $524,320 $10,523,333, MXP70,169,167, $699,650 $11,394,540, MXP55,780,724, - $699,650 The correct answer is Trade Restriction Effects on Exchange Rates. Assume that the Japanese government relaxes its controls on imports by Japanese companies. Other things being equal, how should this affect the (a) U.S. demand for Japanese yen, (b) supply of yen for sale, and (c) equilibrium value of the yen? Decrease, not affected, increase Increase, not affected, decrease Not affected, increase, decrease Not affected, decrease, increase The correct answer is Movements in Cross-Exchange Rates. Last year a dollar was equal to 7 Swedish kronor, and a Polish zloty was equal to $.40. Today, the dollar is equal to 8 Swedish kronor, and a Polish zloty is equal to $.44. By what percentage did the cross-exchange rate of the Polish zloty in Swedish kronor (that is, the number of kronor that can be purchased with one zloty) change over the last year? The correct answer is Percentage Depreciation. Assume the spot rate of the British pound is $1.73. The expected spot rate one year from now is assumed to be $1.66. What percentage depreciation does this reflect? - 2.05 % 4.05 % 6.50 % - 6.50 % The correct answer is Effects of Real Interest Rates. What is the expected relationship between the relative real interest rates of two countries and the exchange rate of their currencies? Higher interest rates, stronger exchange rates Stronger interest rates, higher exchange rates Stronger interest rates, lower exchange rates Lower interest rates, stronger exchange rates The correct answer is Interest Rate Effects on Exchange Rates. Assume U.S. interest rates fall relative to British interest rates. Other things being equal, how should this affect the (a) U.S. demand for British pounds, (b) supply of pounds for sale, and (c) equilibrium value of the pound? Increase, increase, decrease Increase, decrease, increase Increase, decrease, decrease Decrease, increase, decrease The correct answer is