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2. If £/Euro is 0.6338/40 and $/£ 1.5265/67, the synthetic Euro/$ bid rate is
3.
4. The following are the exchange rates quoted in Singapore S$/Euro : 2.0118/21
S$/US$ : 1.7384/86 The synthetic rates of US $/Euro are
5. If the Euro is quoted $ 1.1410 today and the inflation rates are 2% in Euro-zone and
3% in USA, what should be the $/Euro quote after 3 months?
6. The pound sterling quote of a bank is Rs.81.79 / 84. If the banker agrees to quote a
better rate by 2 paise to an Exporter, who is selling £200000, the rate quoted is
8. The relationship between the exchange rate and the prices of tradeable goods is
known as the
a. PPP theory (b) IRP theory (c) Portfolio theory (d) None
9. If U.K. interest rates are higher than Japanese interest rates, the theory of covered
interest arbitrage would suggest that in the £/Yen exchange markets the Yen would
be at a forward _________ and the pound would ___________.
10. If interest rate parity holds and the transaction costs are zero, covered foreign
financing will result in an effective borrowing rate that is
(a) Less than domestic interest rate (b) Greater than domestic interest rate
$/₤ 1.6435/40
1 month 1 0/5
2 months 5/10
3 months 10/15
16. Vijay purchased a draft for £500 from his banker to import books when the pound
was quoted at Rs.78.25/30. Since he could not import the books, he surrendered the
draft to his banker when the pound was quoted at Rs.78.35/40. For Vijay, this
transaction resulted in
a. A profit of Rs.25
b. A profit of Rs.50
c. A profit of Rs.75
d. A loss of Rs.25
One year U.S. interest rate is 4% (Compounded Quarterly) One year interest rate in
Mumbai is 5% (Compounded Quarterly) The six months forward rate for dollar is
Rs.46.00 What is the spot rate that creates interest rate parity?
a. Rs.46.23
b. Rs.46.32
c. Rs.45.66
d. Rs.45.77
18. The eurodollar interest rates in London are as under
2 month 03/04
3 month 04/05
(a) Rs.59.36
(b) Rs.55.35
(c) Rs.55.39
(d) Rs.55.38
20. If
Rs./$ is 48.90/95 and
Rs./£ is 70.80/85,
then implied $/£ quote would be