You are leaving Mexico and have 290 pesos to change into dollars. The exchange rate is now 12 pesos to the dollar. Approximately how many dollars will you receive? A. $24.17 B. $3025.00 C. $264.00 D. $3,480.00

Q: Suppose you are a U.S. investor who is planning to invest $845,000 in Mexico. Your Mexican…

A: DATA GIVEN: Investment amount  = $845,000 Investment gain in Mexico = 10.6% Exchange rate: Original…

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

A: The cross rate functions can be used to calculate the exchange rate of Peso and Pound

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: Suppose one-year US Treasury bill pays 2.28% and one-year Canadian Treasury bill pays 0.95%. The…

A: Arbitrage is a process to earn profit by purchasing one security from the market and selling another…

Q: Suppose one-year German Treasury bill pays 4.12% and one-year Canadian Treasury bill pays 2.33%. The…

A: Option 1: Investing in EURO: Given,  Amount in CAD = 4,000,000 Converting into Euro at Spot Rate  =…

Q: Currently, the USD/MXN rate is 19.7800 and the six-month forward exchange rate is 20.1700. The…

A:

Q: he current market exchange rate is 2.2 francs per pound. Suppose you need to buy 6 pounds using…

A: In international business the exchange rate between the currencies play very important role in…

Q: Suppose exchange rate of Japanese yen in US $ is $.010, exchange rate of euro in US $ is $1.34, and…

A: When there are miss match in exchange rates, there is opportunity for triangular arbitrage profit.…

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: 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: today you notice the following exchange rate quotations. $1 is equal to 4.08 Argentine pesos. 1…

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

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: Currency exchange rates. On the day you arrive in England, the exchange rate for U.S. dollars and…

A: Investing in foreign currency brings currency risk. The returns on the foreign currency depend upon…

Q: Assume US dollars and Canadian dollars are at 1SUS = C$1.08. You have C$1,000,000 at your disposal.…

A: The equivalent Mexican Pesos for one million Canadian dollars is $ 483,000,000.

Q: Suppose one-year German Treasury bill pays 4.2% and one-year Canadian Treasury bill pays 2.94%. The…

A: Arbitrage profit is generated by buying and selling the same assets or portfolio at different prices…

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: (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: The exchange rates in New York for $1 are Can$1.0941 or 0.7257 pounds. In Toronto, Can$1 will buy…

A: Arbitrage is practice of immediate buying and selling of assets including equities, bonds,…

Q: An investor enters a short forward contract to sell 100,000 British pounds for US dollars at an…

A: Forward Contract refers to the contract or agreement that is customized and private in nature made…

Q: Suppose a 1-year UK T-bill pays 2.14% and a 1-year Canadian T-bill pays 1.32%. The current spot…

A: The 1-year forward exchange rate reflects that the GBP is depreciating in respect to CAD. Thus, to…

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: As a foreign exchange trader at a Citibank, you are given the following quotations: 1-month 2-month…

A: The question is based on the concept of the exchange of foreign currency. The exchange rate explains…

Q: Assume that the indirect quote is for 115 Japanese yen per U.S.dollar and that the direct quote is…

A: Computation of Exchange rate of 1Euro is equal to how many yen: The exchange rate is given: 1US$=115…

Q: Suppose one-year German Treasury bill pays 4.13% and one-year Canadian Treasury bill pays 2.95%. The…

A: German treasury bill pays interest at 4.13% whereas Canadian treasury bill pays 2.95%. According to…

Q: Suppose that 1 Danish krone could be purchased in the foreign exchange market today for $0.17. If…

A: Given, 1 Danish Krone = $0.17 krone appreciated by 7%

Q: Suppose the risk free rate in pounds is 5.12% and the risk free rate in US dollars is 7.71%. The…

A: The no-arbitrage exchange rate will be computed by using the current exchange rate, the risk-free…

Q: Currently, the USD/MXN rate is 19.5300 and the three-month forward exchange rate is 20.8400. The…

A: The equilibrium in foreign exchange rates: The exchange rates between two currency pairs are said to…

Q: Complete the following cross-rate table:   USD YEN EURO POUND MEXICAN PESO USD       1.5625   YEN…

A: Triangular Arbitrage opportunities exist in the Foreign exchange trading market. It is the…

Q: At today’s spot exchange rates 1 U.S. dollar can be exchanged for 9 Mexican pesos or for 111.23…

A: The formula used as follows: Cross rate=YenDollar×DollarPeso

Q: An investor based in the US invests $1,200 in Mexico and this generates a future value in one year…

A: Future Value in US          1,344.44 Future Value in Mexico (1344.44 * 5.4)         7,259.98

Q: Today you notice the following exchange rate quotation: $1 = 3 Argentine pesos 1 Argentine pesos =…

A: The cross exchange rates can be used to determine the amount of in currency in terms of another.

Q: You travel to Cancun Mexico for spring break. The current exchange rate is 14 pesos to the dollar.…

A: Rate Given  1$ = 14 pesos

Q: If today 1 US Dollar can buy 3 Korean Won and 1 Korean Won can buy equals 2 Philippine Peso, what is…

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

Q: You see Japanese yen exchange rate as: 106.81 JPY/USD   Direct or Indirect Quote?   Convert $100…

A: A foreign exchange rate indicates the relationship between two currencies at a particular point of…

Q: At today's spot exchange rates 1 U.S. dollar can be exchanged for 10 Mexican pesos or for 110.75…

A: Foreign currency is that currency which is not home county currency. One currency can be exchanged…

Q: dollars

A: Introduction: The term exchange rate can be defined as a rate at which one currency will be…

Q: Suppose that the current spot exchange rate is €0.830/S and the three-month forward exchange rate is…

A: Covered interest arbitrage is an arbitrage trading strategy used by an investor to capitalize on the…

Q: A bundle of goods in Japan costs ¥2,642,000 while the same goods and services cost $32,500 in the…

A: Cost of a bundle of goods in country J is ¥2,642,000 Cost of a bundle of goods in country U.S. is…

Q: If today 1 US Dollar can buy 3 Korean Won and 1 Korean Won can buy equals 2 Philippine Peso, what is…

A: Cross exchange rate is used when there is no direct quotation available between two currencies.…

Q: You live in the United States and want to try to make some money through interest rate arbitrage…

A: Foreign Exchange Market is that under which we were trading in Foreign Currency we can make the…

Q: Suppose the exchange rate between the U.S. dollar and the Swedish krona was 10.0 krona = $1, and the…

A: SEK/USD = 10 USD/GBP = 1.5

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.