Question
PLEASE GIVE DETAILED SOLUTION FOR THE ANSWER: THANKS IN ADVANCE. 1.You are given the following exchange rate quotes in the markets identified: Sydney AUD/USD 1.8769
PLEASE GIVE DETAILED SOLUTION FOR THE ANSWER: THANKS IN ADVANCE.
1.You are given the following exchange rate quotes in the markets identified:
Sydney | AUD/USD | 1.8769 |
New York | AUD/USD | 1.8600 |
Calculate the Australian dollar profit, if any, on a two-point arbitrage. Select one:
a. USD 0.0048
b. 16.9 points
c. Nil
d. AUD 0.0169
2. The price of a commodity in New Zealand is NZ$10 while the price of the same commodity in Australia is AU$6. The current exchange rate (NZD/AUD) is 1.15. What will happen based on the two prices and the current exchange rate? Select one:
a. Arbitrageurs will buy the commodity in Australia at NZ$10.00 and sell it in Australia at NZ$6.90 to make a profit of NZ$3.10
b. Arbitrageurs will buy the commodity in New Zealand at NZ$6.90 and sell it in Australia at NZ$10.00 to make a profit of NZ$3.10
c. Arbitrageurs will buy the commodity in Australia at NZ$10.00 and sell it in Australia at NZ$10.00 and break- even
d. Arbitrageurs will buy the commodity in Australia at NZ$6.90 and sell it in New Zealand at NZ$10.00 to make a profit of NZ$3.10
3. You are given the following exchange rate quotes in Sydney:
USD/AUD | 0.5300 |
AUD/EUR | 1.6428 |
USD/EUR | 0.8782 |
Calculate the US dollar profit, if any, on a three-point arbitrage. Select one:
a. Nil
b. USD 1.0086 for every 1 USD invested
c. USD 0.0086 for every 1 USD invested
d. USD 0.0043 for every 1 USD invested
4. You are given the following exchange rate quotes in Sydney:
USD/AUD | 0.5346 |
AUD/EUR | 1.6428 |
USD/EUR | 0.8782 |
Calculate the US dollar profit, if any, on a three-point arbitrage. Select one:
a. USD 0.0043 for every 1 USD invested
b. USD 0.2320 for every 1 USD invested
c. Nil
d. USD 1.0043 for every 1 USD invested
5. The price of a commodity in New Zealand is NZ$10 while the price of the same commodity in Australia is AU$6. The current exchange rate (NZD/AUD) is 1.15. What is the Australian dollar price compatible with the LOP at the current exchange rate? Select one:
a. 6.90
b. 8.70
c. 10.00
d. 1.67
6. You are given the following exchange rate quotes in the markets identified:
Sydney | AUD/USD | 1.8900/1.9100 |
New York | USD/AUD | 0.5100/0.5200 |
Calculate the Australian dollar profit, if any, on a two-point arbitrage. Select one:
a. AUD 0.0131
b. Nil
c. AUD 1.0131
d. 13.1 points
7. The price of a commodity in New Zealand is NZ$10 while the price of the same commodity in Australia is AU$6. The current exchange rate (NZD/AUD) is 1.15. At the current Australian dollar price, what is the exchange rate compatible with the LOP? Select one:
a. 0.60
b. 1.15
c. 1.67
d. no answer
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