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# 1. If EUSD/CAD is 0.81 and EUSD/GBP is 1.56 what must be

### Customer Question

1. If EUSD/CAD is 0.81 and EUSD/GBP is 1.56 what must be EGBP/CAD? (a) 0.52 (b) 1.26 (c) 1.93 (d) 2.37 Question 2 and 3 2. EUSD/JP Y = 0.008. Interest rates on one year bonds of the Japanese government are 0.01%. Interest rates on one year bonds of the
US government are 1.63%. How many US\$ would you expect to be able to sell for 1 Japanese ¥ using a forward contract that settles in one year? (a) 0.00987 (b) 0.00813 (c) 0.00787 (d) 0.00714 3. What rate of depreciation or appreciation of the US\$ against the
JP¥ must investors be anticipating over the next year, if expected returns on US and Japanese assets are equal, given the facts of part(2)? (a) US\$ is expected to appreciate 1.62% against JP¥ (b) US\$ is expected to appreciate 3.2% against JP¥ (c) US\$ is expected
to depreciate 1.62% against JP¥ (d) US\$ is expected to depreciate 3.2% against JP¥ 4. If the price level recently increased by 20% in England while falling 5% in the United States, how much must the exchange rate change if PPP holds? Assume that the current
exchange rate(EUSD/GBP ) is 1.8. (a) 1.62 (b) 1.85 (c) 2.03 (d) 2.27 5. Does the behavior of the \$-C exchange rate support or contradict the theory of Uncovered Interest Parity? Answer with reference to Figure (1). (a) Supports UIP (b) Contradicts UIP (c)
Both supports and contradicts UIP (d) More information is needed 6. The Japanese central bank announces a new program of ‘quantitative easing’, which involves increasing the growth rate of the Japanese money supply by an additional 5% per year, indefinitely.
Assume prior to the announcement that both the Japanese and US money supplies had not been growing, and goods prices were stable (there was neither inflation or deflation in the US or Japan). What is the likely long-run effect of this new Japanese policy on
Japanese nominal interest rates, and the exchange rate between the ¥and \$? (a) Raise Japanese nominal interest rates by 5% and appreciate ¥ against \$ (b) Raise Japanese nominal interest rates by 5% and depreciate ¥ against \$ (c) Lower Japanese nominal interest
rates by 5% and appreciate ¥ against \$ (d) Lower Japanese nominal interest rates by 5% and depreciate ¥ against \$ 7. Suppose the Bank of Japan allowed the money suuply to growth by 2% each year, while the Bank of Korea chose to maintain relatively high money
growth of 12% per year. In addition, the bank deposits in Japan pay 3% interest, i¥ = 3%. Compute the interest rate paid on Korean deposits. (a) 10% (b) 12% (c) 13% (d) 18%
Submitted: 2 years ago.
Category: Multiple Problems
Customer: replied 2 years ago.
the picture is for number 5
Customer: replied 2 years ago.
there are 7 multiple questions. Please show all the details.
Expert:  F. Naz replied 2 years ago.