Show calculations for each asnwer Use the following information $to$ answer questions $26to28$

Michael $isan$ investor based $in$ New York $He$ holds $100$ shares $of$ Bescherelle, a French

firm that went public $in$ March $2015.He$ bought the shares $at18$ per share.

$At$ that time, the dollar euro exchange rate was $$\frac{1\mathrm{.}360}{}.$ Now, the share $is$ trading $at25$

and the dollar euro exchange rate $is$ $$\frac{1\mathrm{.}410}{}.$

$If$ Michael sells his shares today, what percentage change $in$ the share price would

$he$ receive?

$A.55\mathrm{.}43\%$

$B.40\mathrm{.}11\%$

$C.38\mathrm{.}89\%$

$D.23\mathrm{.}34\%$

$E.15\mathrm{.}30\%$

Over this period, $by$ how much has the Euro appreciate$\frac{d}{d}$epreciated against the

dollar?

$A.$ Appreciated $by3\mathrm{.}68\%$

$B.$ Depreciated $by3\mathrm{.}68\%$

$C.$ Devalued $by3\mathrm{.}68\%$

$D.$ Appreciated $by3\mathrm{.}54\%$

$E.$ Depreciated $by3\mathrm{.}54\%If$ Michael sold his shares $at$ those rates, what would $be$ the total return $(in$ USD$)?$

$A.$ $$987$

$B.$ $$1,077$

$C.$ $$1,257$

$D.$ $$1,327$

$E.$ $$3,525$

Coffee Bean and Tea Leaf $(CBTL)$ started operating $in$ Malaysia $in$ May, $2008.$

The price $ofan$ Americano $in$ Kuala Lumpur $isRM8.$ The same Americano can

$be$ purchased $in$ Miami for $$3.$ The exchange rate between Malaysian Ringgit and

$U.S$ dollar $isRM\frac{4\mathrm{.}29}{\text{\$}}.$ According $to$ purchasing power parity, $is$ the Malaysian

ringgit overvalued $or$ undervalued?

$A.$ Overvalued $by60\mathrm{.}67\%$

$B.$ Undervalued $by60\mathrm{.}67\%$

$C.$ Overvalued $by62\%$

$D.$ Overvalued $by37\mathrm{.}76\%$

$E.$ Undervalued $by37\mathrm{.}76\%$ Japan's Sony exports budget cameras $to$ the United States. When the exchange rate

was $130+\frac{-}{\text{\$}},$ the price $of$ the Sony Camera was $$150in$ the $US.$ Now, the sport rate $is$

$110+\frac{-}{\text{\$}}$ and Sony $is$ selling the cameras for $$170.$ What $is$ the degree $of$ pass$-$through

$to$ the $U.S.$ dollar price $of$ the Sony Camera?

$A.95\mathrm{.}9\%$

$B.87\mathrm{.}7$

$C.77\mathrm{.}36\%$

$D.73\mathrm{.}2\%$

$E.60\mathrm{.}18\%$ Use the following information $to$ answer questions $37to40$

Harmony $of$ Manhattan, New York, $is$ building a new factory $in$ Malaysia. $In$ three

months, the company has $to$ pay $RM30,000,000.$ The currency $is$ Malaysian Ringgit.

Harmony's weighted average cost $of$ capital $is15\%.$ The foreign exchange and interest

quotations are the following:

Harmony's treasury manager, concerned about the exchange rate fluctuations,

contemplates hedging its foreign exchange risk. The manager's own forecast $isas$

follows: $$

Harmony can remain unhedged, purchase ringgit forward $or$ invest. Calculate the cost $of$

each alternative

Wait six months and make payment $at$ spot rate: choose the correct values

corresponding $to$ the expected rates given.

$A.$ $$6,250,000\mathrm{.}00,$$$6,666,66\mathrm{.}67,$$$7,894,736\mathrm{.}84$

$B.$ $$6,350,000\mathrm{.}00$$$6,766,66\mathrm{.}67,$$$8,894,736\mathrm{.}84$

$C.$ $$6,250,000\mathrm{.}00$$$6,766,66\mathrm{.}67,$$$7,894,736\mathrm{.}84$

$D.$ $$6,250,000\mathrm{.}00$$$6,666,66\mathrm{.}67,$$$8,894,736\mathrm{.}84$

$E.$ $$7,500,000\mathrm{.}00,$$$7,142,85714,$$$7,894,736\mathrm{.}84$Purchase Ringgit forward $3-$months:

$A.$ $$6,666,66\mathrm{.}67$

$B.$ $$7,142,857\mathrm{.}14$

$C.$ $$7,500,000$

$D.$ $$7,894,736\mathrm{.}84$

$E.$ $$6,250,000$

Transfer dollars $to$ Ringgit today, invest for $3-$months:

$A.$ $$7,352,941\mathrm{.}18$

$B.$ $$7,500,000$

$C.$ $$7,628,676\mathrm{.}47$

$D.$ $$7,650,000$

$E.$ $$7,575,000$

Choose the best alternative

$A.$ Remain Unhedged

$B.$ All the alternatives are equally good

$C.$ Transferring dollars $to$ Ringgit and investing them for $3-$months

$D.$ Forward Contract

$E.$ More information $is$ needed