(1) if five year interest rates on USD and CDN are 6% and 5%respectively, and the current spot rate for CDN is $0.90/USD. whatis the imlied five year CDN spot rate?
(2) Suppose that the Brazilian real devalues by 40% against theUSD. By how much will the dollar appreciate against the real?
(3) What is the 90 day forward rate if US interest is 9%,Japanese interest is 7%, and the Spot rate is $0.003700/ Yen? (assume there are no arbitrage and 360 day and interest rateparity)
(4) what is the annualized premium on the 90 day forward rate ifthe spot rate is $0.003800/Yen and the forward rate is $0.003828/Yen ?
(5) Suppose annual inflation rate in the US and Mexico areexpected to be 6% and 80% respectively, over the next severalyears. If the current spot rate for Mexico peso is $0.005. what isthe best estimate of the peso's spot value in 3 years?
(9) if the expected inflation rate is 5% and the real requiredreturn is 6% , then the fisher effect says that the nominalinterest rate should be.....
(10) During the 1992 currency crisis, the bank of englandborrowed DM 33 billion from the Bundesbank when a pound was worthDM 2.78 or $1.912. It sold these DM in the foreign exchange marketfor pounds and repaid these DM at the post- crisis rate of DM2.50:pound 1. By then, the dollar: pound exchange rate was $1.782:pound 1. During that time, by what percentage had the poundsterling appreciated/ depreciated against the dollar?
