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You dont have to show work. And please answer all the questions. Suppose IRP and IFE hold between the United States and the Eurozone. If
You dont have to show work. And please answer all the questions.
Suppose IRP and IFE hold between the United States and the Eurozone. If I will owe Euro in the near future, the best action would be to: O Purchase futures contracts on Euro Purchase forward contracts on Euro Do nothing, simply purchase Euro at the spot rate when needed If IRP and IFE hold any of the choices given will produce the same result. Which of the following best describes the role(s) of IRP PPP and IFE in currency pricing & forex markets O FE and PPP deal with changes in the spot market over time IRP ensures that interest rate differentials are reflected in the relationship between Forward and Spot markets O FE and PPP are driven primarily by inflation differentials All of the choices taken together just about sum it up Suppose IFE and IRP hold between the United States, Canada and Japan. 1 year interest rates are as follows: JAPAN CANADA UNITED STATES 1.5% 6.5% 3.5% Who of the below will earn the highest NOMINAL rate of return on invested funds? AUS based investor who uses Covered Interest Arbitrage in Canada O AJapanese investor who exchanges her Yen for Canadian dollars to engage the carry trade O A Canadian investor who exchanges his Canadian Dollars for Yen and covers her position in the futures market @ AUS based investor who exchanges her US Dollars for Canadian Dollars to engage the carry trade Suppose IRP and IFE hold between the United States and the Eurozone. If I will owe Euro in the near future, the best action would be to: O Purchase futures contracts on Euro Purchase forward contracts on Euro Do nothing, simply purchase Euro at the spot rate when needed If IRP and IFE hold any of the choices given will produce the same result. Which of the following best describes the role(s) of IRP PPP and IFE in currency pricing & forex markets O FE and PPP deal with changes in the spot market over time IRP ensures that interest rate differentials are reflected in the relationship between Forward and Spot markets O FE and PPP are driven primarily by inflation differentials All of the choices taken together just about sum it up Suppose IFE and IRP hold between the United States, Canada and Japan. 1 year interest rates are as follows: JAPAN CANADA UNITED STATES 1.5% 6.5% 3.5% Who of the below will earn the highest NOMINAL rate of return on invested funds? AUS based investor who uses Covered Interest Arbitrage in Canada O AJapanese investor who exchanges her Yen for Canadian dollars to engage the carry trade O A Canadian investor who exchanges his Canadian Dollars for Yen and covers her position in the futures market @ AUS based investor who exchanges her US Dollars for Canadian Dollars to engage the carry trade
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