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You were considering buying a camera 1 month ago from Japan which was priced at 1 5 0 , 0 0 0 yen. If the
You were considering buying a camera month ago from Japan which was priced at yen. If the exchange rate has changed from usd yen one month ago to usd yen today, how much in dollars will you save if you buy the camera today?
A used Toyota Hilux costs $ in the United States and dinar in Lybia. The exchange rate implied by PPP is usd dinar.
usd yen
peso yen
The implied cross exchange rate between dollars and pesos is usd pesos. round to two decimal places
If the actual exchange rate is usd pesos, you can earn arbitrage profits by:
assume there are no transaction costs
A shorting the peso in the forward market
B shorting the yen in the forward market
C exchanging yen for dollars, dollars for pesos, then pesos for yen
D exchanging yen for pesos, pesos for dollars, then dollars for yen
The spot exchange rate is peso yen. If Japanase oneyear riskfree securities are offering a return, while Mexican riskfree securities yield then the noarbitrage year forward exchange rate according to interest rate parity is peso yen. round to two decimal places
If the actual year forward exchange rate is peso yen, you can earn arbitrage profits by:
a borrowing pesos today & exchanging for yen, selling pesos in forward market
b borrowing yen today & exchanging for pesos, selling pesos in forward market
c borrowing pesos today & exchanging for yen, buying pesos in forward market
d borrowing yen today & exchanging for pesos, buying yen in forward market
In the previous question, you will earn arbitrage profits equal to:
a yen if you start by borrowing yen today
b pesos if you start by borrowing pesos today
c pesos if you start by borrowing pesos today
d yen if you start by borrowing yen today
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