You are given the following information about a country’s international transactions during a year:
a.Calculate the values of the country’s goods and rvices balance,current account balance,and official ttlements balance?
a.Merchandi trade balance: $330 - 198 = $132
Goods and rvices balance: $330 - 198 + 196 - 204 = $124
Current account balance: $330 - 198 + 196 - 204 + 3 - 8 = $119
Official ttlements balance: $330 - 198 + 196 - 204 + 3 - 8 + 102 - 202 + 4 = $23
b.What are the value of the change in official rerve asts(net)?Is the country increasing or decreasing its net holdings of official rerve asts?
b.Change in official rerve asts (net) = - official ttlements balance = -$23
The country is increasing its net holdings of official rerve asts.
What are the major types of transactions or activities that result in supply of foreign currency in the spct foreign exchange market?
Exports of merchandi and rvices result in supply of foreign currency in the foreign
exchange market. Domestic llers often want to be paid using domestic currency, while
the foreign buyers want to pay in their currency. In the process of paying for the exports,
foreign currency is exchanged for domestic currency, creating supply of foreign currency.
International capital inflows result in a supply of foreign currency in the foreign exchange
market. In making investments in domestic financial asts, foreign investors often start
with foreign currency and must exchange it for domestic currency before they can buy the
domestic asts. The exchange creates a supply of foreign currency. Sales of foreign
financial asts that the country's residents had previously acquired, and borrowing from
foreigners by this country's residents are other forms of capital inflow that can create
大米粥supply of foreign currency.
You have access to the following three spot exchange rates:
＄0.01/yen
＄0.20/krone
25yen/krone
You strat with dollars and want to end up with dollars论文题目怎么写
a.hoe would you engage in arbitrage to profit from the three rates?what is the profit for each dollar ud initially?
a.The cross rate between the yen and the krone is too high (the yen value of the krone is
too
成熟英语high) relative to the dollar-foreign currency exchange rates. Thus, in a profitable
triangular arbitrage, you want to ll kroner at the high cross rate. The arbitrage will be: 美国恐怖故事第七季
镇静的反义词
U dollars to buy kroner at $0.20/krone, u the kroner to buy yen at 25 yen/krone, and
u the yen to buy dollars at $0.01/yen. For each dollar that you ll initially, you can
obtain 5 kroner, the 5 kroner can obtain 125 yen, and the 125 yen can obtain $1.25. The
arbitrage profit for each dollar is therefore 25 cents.
b.As a result of this arbitrage,what is the pressure on the cross-rate between yen and krone?what must the value of the cross-rate be to eliminate the opportunity for triangular arbitrage?
b.Selling kroner to buy yen puts downward pressure on the cross rate (the yen price of
krone). The value of the cross rate must fall to 20 (=0.20/0.01) yen/krone to eliminate the 商品出售
opportunity for triangular arbitrage, assuming that the dollar exchange rates are
unchanged.
Explain the nature of the exchange rate risk for each of the following,from the perspective of the U.S frim or person.in your answer,include whether each is a long or short position in foreign currency.
a.a small U.S firm sold experimental computer computer compoments to a Japane firm,and it will receive payment of 1 million yen in 60 days.形意拳十二形
a.The U.S. firm has an ast position in yen—it has a long position in yen. To hedge its
exposure to exchange rate risk, the firm should enter into a forward exchange contract
now in which the firm commits to ll yen and receive dollars at the current forward rate.
The contract amounts are to ll 1 million yen and receive $9,000, both in 60 days.
The current spot exchange rate is ＄1.20/euro.the current 90-day forward exchange rate is＄1.u expect the spot rate to be ＄1.22/euro in 90 days.how would you speculate using a forward contract?if many people speculate in this way,what pressure is placed on the walue of the current forward exchange rate?
