Thailand and Czechoslovakia are running annual inflation rates of 8 % and 6 % respectively. The current spot FX in Thailand is THB1.4052/CZK. Using inflation rate differential, the value of THB in one year will be __________

a.

0.98148

b.

1.3791

c.

0.698464

d.

1.431713

Which of the following is true about derivatives?

a.

The terms and conditions are flexible under derivative trading

b.

Value of derivative is derived from predetermined asset

c.

Derivative markets are suitable for low risk investors

d.

Risk on derivatives market are always low

Which of the following is not true about derivatives?

a.

The terms and conditions are flexible under derivative trading

b.

Value of derivative is derived from predetermined asset

c.

Derivative markets are suitable for high risk investors

d.

Investors will have high risk trading in derivatives.

Spot rate CHF2.368714 = 1 OMR , It is expected that CHF may appreciate by 2% after one month. What will be the new exchange rate between CHF/OMR?

a.

2.36868

b.

2.32134

c.

0.43062

d.

2.416054