1．The International Fisher Effect suggests that
A. Any forward premium or discount is equal to the expected change in the exchange rate
B. Any forward premium or discount is equal to the actual change in the exchange rate
C. The nominal interest rate differential reflects the expected change in the exchange rate
D. An increa (decrea) in the expected inflation rate in a country will cau a proportionate increa (decrea) in the interest rate in the country
2．Generally unfavorable evidence on PPP suggests that
A. Substantial barriers大便颜色是黑的怎么回事 to international commodity arbitrage exist
B. Tariffs and quotas impod on international trade can explain at least some of the evidence
C. Shipping costs can make it difficult to directly compare commodity prices
D. All of the above
3． If the annual inflation rate is 2.5 percent in the United States and 4 percent in the U.K., and the dollar appreciated against the pound by 1.5 percent, then the real exchange rate, assuming that PPP initially held, is:
A. parity
镇定的反义词
B. 0.9710
C.岩溶塌陷 -0.0198
岛歌唱腔D. 4.5
Equation 6.14:
4．As of today, the spot exchange rate is €1.00 = $1.60 and the rates of inflation expected to prevail for the next year in the U.S. is 2% and 3% in the euro zone. What is the one-year forward rate that should prevail?
A. €1.00 = $1.6157
B. €1.6157= $1.00
C. €1.00 = $1.5845
D. $1.00 1.03 = €1.60 1.02
Take the spot rate and gross up each side by the respective inflation rates
5．If a foreign county experiences a hyperinflation
A. Its currency will depreciate against stable currencies大公鸡喔喔叫儿歌
B. Its currency may appreciate against stable currencies
C. Its currency may be unaffected—it's difficult to say
D. None of the above操视频
6．Suppo that the annual interest rate is 5.0 percent in the United States and 3.5 perc
ent in Germany, and that the spot exchange rate is $1.12/€ and the forward exchange rate, with one-year maturity, is $1.16/€. Assume that an arbitrager can borrow up to $1,000,000. If an astute trader finds an arbitrage, what is the net cash flow in one year?
A. $10,690
B. $15,000
C. $46,207
D. $21,964.29
$21,964.29 = -$1,000,000 (1.05) + $1,000,000 (1.035)
7． Suppo that the annual interest rate is 2.0 percent in the United States and 4 percent in Germany, and that the spot exchange rate is $1.60/€ and the forward exchange rate, with one-year maturity, is $1.58/€. Assume that an arbitrager can borrow up to $1,000,000 or €625,000. If an astute trader finds an arbitrage, what is the net cash f
low in one year?
A. $238.65
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B. $14,000
C. $46,207
进入路由器设置D. $7,000
Borrow $1,000,000 at 2% Buy € at spot exchange rate $1.60 = €1.00 Invest €625,000 at 4% Go SHORT in forward contract on €650,000 (ll @ posted BID) $1.58 = €1
Cash flow in 1 year =
