INTERNATIONAL FINANCE Quiz01 15Feb10 Name:________________

This is only a sample quiz

1. If the British pound (£) is selling for $1.6385, and

the Canadian dollar (C$) is selling for $.6591, what is the
cross rate between...
a) the £ and the C$? (£/C$) = ______
b) the C$ and the £? (C$/£) = _____
c) the US$ and the C$? ($/C$) = ______

2. Assume that $/Ps=.09160 in Mexico City, and Ps/€ =

11.8157 in Zürich and €/$=.9229 in NYC. Start with $1M and
show the trades (a,b,c) that would yield an arbitrage
profit. Note: in sell& buy answers, show both currency and
amount.

a) city___________ sell__________ buy____________

b) city___________ sell__________ buy____________

c) city___________ sell__________ buy____________

3. Calculate the arbitrage profit as a percent of original

investment.__________%

4. Assume Deutsche Bank quotes €/C$ @ .60805-15 and Royal

Bank of Canada quotes €/C$ @ .60818-20.
a) Is there an arbitrage opportunity? Y/N? ____
b) If so, one would buy from __________ and sell to _____?
c) Calculate the return (i.e. the profit as a %) _______%

5. Fill in the blanks in the following cross rate table.

Note: Each cell is the number of units of the FIRST ROW
currency per single unit of the LEFT HAND COLUMN

US$ € ¥ £ Ps

US$ ___ ___ ___ ___ ___

€ ___ ___ ___ ___ ___

¥ ___ ___ ___ ___ ___

£ ___ ___ ___ ___ ___

Ps ___ ___ ___ ___ ___

6. Given:
Merchandise imports 89469
Merchandise exports 96000
Service exports 10901
Services imports 10819
Investment income receipts 4032
Investment income payments 17099
Unilateral Transfers (net) 4531
Calculate:

a) balance of trade $________

b) Current account $________
c) Capital account $________

7. What are the keyboard strokes for €,£,¥ ?