Please ANSWER ALL questions NOT one of them with EXPLANATION:

1. A firm can swap floating dollar payment for fixed euro receipts by combining both 1) paying LIBOR-$ and receiving a fixed amount in Euros and 2) paying a fixed amount in Euros and receiving LIBOR-

A.True

B.False

2. Take the following quotes and determine the maximum amount of triangular arbitrage profit possible stating with $100,000 and making one trip around the triangle

----------------------------------------ASKS BIDS------------------------------------------------

Deutsche Bank: ----------------> .784/ .781/

Barclays:---------------------------> .783/ .780/

Deutsche Bank:----------------> $1.547/ $1.541/

Barclays:-------------------------> $1.548/ $1.542/

Deutsche Bank:----------------> .8025/$. .7950/ $

Barclays:--------------------------> .8055/$ .7945/ $

3. Assume the following information:

You have $1,000,000 to invest

Current spot rate of pound = 1.6000

90-day forward rate of pound = 1.5901

3-month deposit rate in U.S.= 3% (periodic rate)

3-month deposit rate in U.K.= 8% (periodic rate)

If you use covered interest arbitrage for a 90-day investment, what will be the amount of U.S. dollars you will have after 90 days?