If the exchange rate is such that $1 equals 5 euros, then the price of a euro is $5 $1 $0.40 $0.20

Q: Crazy car price in Pounds is 576 and in Euros is 642. What is the exchange rate for Euro? a) 1.1146…

A: Solution: Price of Car in Pound = 576 Price of car in Euro = 642

Q: Suppose the exchange rate between U.S. dollars and Swiss francs is SF 1.41 = $1.0o, and the exchange…

A: Exchange rate (ER) is a value at which 2 different currencies are exchanged or traded. ER is…

Q: Let the NZ$-Euro exchange rate be 0.60 (1 NZD buys 0.60 Euro). Let the NZ price level (P) be 40 and…

A: Real exchange rate or RER is that exchange rate which is inflation adjusted i.e. rate is adjusted…

Q: The current exchange rate is 1.1 dollars per euro. A 5-year U.S.government bond has a 3% yield, and…

A:

Q: euro

A: Foreign exchange rate can be defined as an exchange rate in which one currency can be exchanged…

Q: Question If the exchange rate is such that $1 equals 5 euros, then the price of a euro is Answer a.…

A: Given information is: Exchange rate: $1 = 5 Euros

Q: The following quotes are given as follows: Tunisian Dinar(TND) 1.43100=1 USD and USD2.59713=1 OMR…

A: TND/OMR = 1.43100 * 2.59713 = 3.71649

Q: The current exchange rate is $1.19 / Euro. The expected inflation rate for the next year in the U.S.…

A: Current Exchange Rate (Spot Rate) =$1.19 / Euro Inflation Rate in US = 0.62% Inflation Rate in…

Q: The Swiss Franc is trading at 1.1106 $/SFr, the euro is trading at 1.1268 $/euro. If you can buy or…

A: Arbitrary profit is the excess amount earned by using the mis-pricing in the market.

Q: If the ZAR/USD exchange rate declines from 11.2500 to 11.2450, then the fall is equal to     5…

A: Pip means percentage in point or price interest point. It is the measurement of smallest change in…

Q: A computer costs $500 in the United States. The same model costs €550 inFrance. If purchasing power…

A:

Q: Briefly explain what "forward premium" is. Today's British Pounds to US Dollars Exchange Rate is…

A: Exchange rate (ER) is a value at which two currencies are traded or exchanged. Exchange rate depends…

Q: If it takes 1.25 euros to buy 1 US dollar, the direct quote for the exchange rate in Europe is: A.…

A: direct quotes states what amount of domestic currency required to buy one unit of foreign currency.

Q: Suppose it is January 1980 and the $/DM exchange rate is DM1 = $0.36 and the DM/FF exchange rate is…

A: The question is based on the concept of Forex transactions.

Q: Crazy car price in Pounds is 576 and in Euros is 642. What is the exchange rate for Eure a) 1.1146…

A: Exchange rate is the rate at which a person can exchange one currency for another. It can be direct…

Q: d) You observe the following exchange rates in the market.       i) $1 = 0.85 euros and 1 krona = $…

A:

Q: 9. Suppose current exchange rate is 250 yen=1$ and interest rate is 6% in Japan and 7% in US.…

A: Forward rate = [Spot rate  * (1 + domestic interest rate) ]/ (1 + foreign interest rate).

Q: The current exchange rate is €0.92 per U.S. dollar, but you think that U.S. dollar will appreciate…

A: Given: Current exchange rate (Spot rate)=€0.92 per U.S dollarForward exchange  rate=€0.95 per U.S.…

Q: Is there any violation of CIP? (b) Calculate the covered margin (going short on the AUD). (c)…

A: Here the spot rate is lower than the forward rate, so the EUR is selling at a premium.  The interest…

Q: A computer cost $1,300 in the United States. The same computer costs € 1,100 euros in Europe.…

A: The purchasing power parity( PPP) states that the cost of two identical goods will be the same in…

Q: if 1 OMR = $ 2.60, so what is the exchange rate in terms of 1 US$?

A: Currency exchange rate is the rate at which one currency can be exchanged i.e. bought or sold for…

Q: Suppose that the EUR/USD spot exchange rate is EeUr'USD =0.95 and that a 12-month for contract is…

A: The rates may go up and down depending on the interest rate and there may be appreciation or…

Q: In the spot market, P1 = 100 USD, 1 USD = 0.95 Yen, and 1 Yen = 5.50 British Pound. What is the…

A: Exchanges rates are those rates in which currency of one country can be exchanged with another…

Q: Suppose the exchange rate between the U.S. dollar and the EMU euro is€0.80 = $1.00 and the exchange…

A: A cross rate is the money exchange rate between 2 currencies if the nation where the exchange rate…

Q: (a) Determine the cross rate for ARS/OMR? (b) If you wanted to exchange ARS 20,000, how much OMR…

A: Cross Rate = The Exchange Rate between two currencies is calculated using the third currency which…

Q: Crazy car price in Pounds is 576 and in Euros is 642. What is the exchange rate for Euro? a) 1.1146…

A: Exchange rate is the value of one currency expressed in terms of another currency. It is the rate at…

Q: The dollar-euro exchange rate is USD 1.25 = EUR 1, and the dollar-yen exchange rate is JPY 100 = USD…

A: Cross rate for Euro Yen  = USD/EUR * JPY/USD

Q: If it takes 1.25 euros to buy 1 US dollar, the direct quote for the exchange rate in Europe is?

A: Direct quotes gives the units of domestic currency per unit of foreign currency

Q: If spot rate is USD2.5968/OMR and interest rate for USD is 29% per annum. One-year forward exchange…

A: Spot Rate = 2.5968/OMR Interest Rate for USD = 2% per annum Forward Rate = 2.6008/OMR Interest Rate…

Q: Currently, $1 = SAR 25, SAR 1 = 0.025 Yen. What is the exchange rate between the U.S. dollar and the…

A: exchange rate between the U.S. dollar and the Japanese Yen = SAR / $ * Yen / SAR

Q: Assume that 1 U.S. dollar can be exchanged for 105 Japanese yen or for 0.80 euro.What is the…

A: Exchange rate the rate at which currency of one country can be exchanged for other currency. These…

Q: Suppose that the quote for Euro is 1.1120-44/EUR. If you want to buy 259, which of the following is…

A: The quote for Euro 1.1120-44/EUR  represents the bid-ask spread whereby the bid is 1.1120 and the…

Q: In March 2019, the exchange rate was 3200 Col/$ In May 2019, the exchange rate was 4000 Col/$ What…

A: Calculation of percentage change for Columbia and US Dollar is shown below: Hence, US Dollar has…

Q: The current exchange rate applying the concept of Absolute PPP is $1.00 = P50 Assuming the inflation…

A: Current exchange rate $ 1 = P 50 Inflation rate in US = 4.5% Inflation rate in Philippines = 2.9%

Q: If the exchange rate is such that $1 equals 5 euros, then the price of a euro is a. $5 b. $1 c.…

A: A rate through which individuals or companies convert their domestic currency with the other…

Q: In the spot market, P1 = 100 USD, 1 USD = 0.95 Yen, and 1 Yen = 5.50 British Pound.  What is the…

A: Cross exchange rate method is used when there is no direct quotation of currencies. Thereafter, with…

Q: Suppose you have the following spot exchange rates:   USD/AUD 0.5300 AUD/EUR 1.6428 USD/EUR…

A: Triangular Arbitrage is a trading strategy in which profit is earned from the price differential of…

Q: The spot rate is EURO1.9719/OMR. It is expected that EURO may appreciate by 1% after one month. What…

A: Please note that the information given in the question does not matches with the options given in…

Q: d) You observe the following exchange rates in the market.i) $1 = 0.85 euros and 1 krona = $ 0.13.…

A: i)  Compute the cross exchange rate between euro and krona:

Q: If one year forward rate is EUR2.1830/OMR and interest rate for EURO is 6% per annum and for OMR is…

A: Spot Exchange Rate = Forward Exchange Rate x (1+ Foreign interest Rate) /(1+Home currency Interest…

Q: On January 1, 2021, Euro and USD exchange rate was 1.23 USD/EUR. Today, the Euro exchange rate is…

A: A rate through which individuals or companies convert their domestic currency with the other…

Instruments of Foreign Exchange Market

Foreign exchange is a worldwide market in which one nation’s currency is converted into another nation’s currency. In further terms, exchanging of nations currency with foreign currencies. Foreign exchange happens at a specified rate which is termed the foreign exchange rate. The exchange rates are not constant continuously changing as they are derived by market forces of supply and demand. Widely used foreign currencies are the United States- dollar, Euro, Japanese Yen, British pound, and Australian dollar. US- dollar is the most denominated foreign currency. The Euro to US dollar is a widely used currency pair in the forex market as these two currencies represent the world’s enormous economy. Forex trade is simple as exchanging currencies at the bank. The main players of forex markets are the central banks, financial institutions, intermediaries, investments banks, and other banks. Central Bank is the supreme player who decides the currency value of their own nation on the forex market. Mostly foreign exchange-traded at FX market (forex market) when tourists’ visits a foreign country, import, and export happens between two countries.