Mini 16. An Australian company has received USD in payment for goods exported. At the time of receiving the USD, the exchange rate is quoted as AUD/USD 0.5650. Rather than immediately convert the USD into AUD, the company decides to 'speculate' on a favourable movement in the exchange rate. In 'today + n days' the exchange rate is AUD/USD 0.5750. Which of the following statements is correct? A: The company has taken a short position in the USD. B: The exporter company has made a loss on its foreign exchange position. C: The opportunity cost of interest forgone will affect the profitability of the FX position. D: B&C. 17. Calculate the current exchange rate AUD/GBP. given these two quotes: AUD/USD 0.5640-50 GBP/USD 1.5850-60 A: AUD/GBP 0.3558-62 B: AUD/GBP 0.3556-65 C: AUD/GBP 0.8945-55 D: AUD/GBP 0.8939-45 18. The principle of interest rate parity asserts that: A: the relative spot exchange rates determine the relativity between the forward exchange rates and spot rates B: the relativity between spot and forward exchange rates reflects the interest rate differentials between countries C: the relative forward exchange rates determine the relativity between the spot exchange rates and the forward interest rate D: the relative forward exchange rates determine the relativity between the forward exchange rates and forward interest rates 19. An increase in demand for a country's the long run, while increase in demand for _ will cause its currency to appreciate in will cause its currency to depreciate. A: exports: exports B: imports; imports C: imports; exports D: exports; imports Page 5 of 12