What is expected spot rate 2 years from now?

current spot rand 1200/$

interest rate in US 8%/yr

interest rate South Africa 14%/yr

interest rates stay constant next 2 years

a. Rand 1000/$

b. Rand 1000/$-rand 1100/$

C. Rand 1100/$-1200/$

D. Rand 1200/$-1300/$

E. Greater Rand 1300/$

A forward transaction means:

a. Delivery and pay must be made within 2 business days

b. calls for delivery of currency at fixed future date at fixed rate

c. sets future date when delivery of currency

US firm chose to deposit money in British bank and have it denominated in US dollars. THis is an example of ___________ deposit.

a. impounded

b. Euroyen

c. Europound

d. Eurodollar

A foreign currency contract allowing the holder the right to purchase 62500 Euro on or before March 15th at a price of Euros 1.5400/$ is

a. a forward contract

b. a put option on a US dollar

c. March futures on Euros

d. American call option on Euros