1. What is foreign exchange? (5 marks)

2. Maybank KL agrees to sell Japanese yen 100 million to a corporate company in Kulim, Kedah at the prevailing spot rate on Tue 3. Based on the information in table below, when must exchange of currency take place at the latest? Tick your answer in the box at the bottom of the correct column. (1.5 mark)

Sun 1	Mon 2	Tue 3	Wed 4	Thu 5	Fri 6	Sat 7	Sun 8	Mon 9	Tue 10	Wed 11
		Contract to sell & buy established. Seller in KL, buyer in Kedah	Federal Public holiday		Kedah state holiday				Fed. Public holiday

3. Compare the exchange rates in table below and write X in the row that indicates that MYR is stronger against Can$. There is only ONE correct answer. (1 mark)

Currencies	Selling	Buying	Answer
Can$/MYR, spot rate	3.2323	3.1122
Can$/MYR	3.0577	3.0111
Can$/MYR	3.1348	3.2032
Can$/MYR	4.5566	4.2233

4. This question is on Interest Rate Parity Theory. Given the following quotation on current interest rates, determine if MYR in future is going to be weaker, stronger or at par (spot rate and forward rate remain the same) against AUS$. Write your answers in the appropriate rows of the last column given below. (3 marks)

Interest rate	MYR	AUS$	Your Answer
1 month	3.0%	3.0%
3 month	3.6%	4.2%
6 month	4.7%	4.3%

5. You are given the following quotation against ringgit:

Currency	Selling TT/OD	Buying TT	Buying OD	Currency Notes
				Selling	Buying
1 Euro	5.6000	5.4400	5.4200	5.7720	5.4330
1 Canadian Dollar	3.0110	2.9100	2.8980	3.1750	2.9030
1 New Zealand Dollar	2.6510	2.5300	2.5140	2.8760	2.5090
100 Philippine Peso	8.9900	8.4300	8.2300	9.0000	8.4300
1 Singapore Dollar	2.8535	2.6233	2.6000	2.9755	2.6377

Based on the above quotation, answer the following questions:

1. You sell ringgit and buy 100 Canadian Dollar at ___________ (1 mark)

2. You sell ringgit to buy 100 Singapore dollar at ______________ (1 mark)

3. You receive a draft of 100 New Zealand Dollar from overseas. You sell that draft and buy ringgit at ________________. (1.0 marks)

4. How much ringgit will you sell in order to buy 1000 Philippine Peso from your bank and ask your bank to send it by TT to overseas? Show your calculation. (2 marks)

5. You sell ringgit in order to buy draft for 100 EURO from your bank at _________________ (1.0 marks)

6. You sell foreign draft of 100 Singapore Dollar to the bank and buy ringgit at________________ (1.0 marks)

7. You receive 100 Canadian Dollar sent by TT. You sell that TT in order to buy ringgit at __________________

(1.0 marks)

6. Based on the following information, write DQ for direct quotation and IQ for indirect quotation in the last column. (5 marks)

Quotation	Location of Quotation	DQ or IQ?
Singapore Dollar/Australian Dollar	Di Sydney, Australia
Singapore Dollar/Australian Dollar	Di Singapura
Canadian Dollar/Sterling Pound	Di Toronto, Canada
Swiss Franc/USD	Anywhere in the world
USD/any currency	Anywhere in the world