Started on Friday, 13 August 2021, 11:31 PM

State Finished
Completed on Friday, 13 August 2021, 11:32 PM
Time taken 41 secs
Grade 0.00 out of 22.00 (0%)

Question 1
Not answered

Marked out of 2.00

Biopharma-Australia can borrow fund

in Australia with an interest rate of 11.05% to invest 1.75 million Chinese yuan
(CNY) and
expected return of CNY2.17 million next year. Assume that
Biopharma-Australia and Haier-China engage in a parallel loan in
which the Haier-China
gives Biopharma Australia CNY1.75 million in exchange for a loan in Australian
dollar (A$) at the current
exchange rate A$0.2616/CNY. These loans will be
repaid by both parties at the end of one year. Assume that next year,
Biopharma-Australia
will pay the Haier-China 14.58% interest on CNY1.75 million and that the Haier-China
will pay Biopharma-
Australia 7.49% interest on the Australian dollar loan.
Also, Biopharma-Australia believes that the CNY will depreciate to
A$0.1872/CNY next year. How much the Biopharma-Australia will make a profit or
loss in A$ from this parallel loan agreement
in one year.  (enter the whole number without sign or symbol)

Answer: 

The correct answer is: 14562

Question 2

Not answered

Marked out of 2.00

You have the following financial market

information. You also have 1.78 million Australian dollar (A$) or 3.15 million
Thai baht
(THB) to make a profit due to covered interest arbitrage (CIA).
Calculate the profit in A$ or THB if the CIA opportunity exists in
the market.
(enter the whole number without sign and symbol)  

Bid price Ask price

THB spot rate A$0.0468 A$0.0658

THB one-year forward rate A$0.0474 A$0.0691

A$ spot rate THB22.8548 THB24.7984 Answer: 

A$ one-year forward rate THB27.5316 THB29.6057

Deposit rate Loan rate

Interest rate on A$ 2.23% 4.48%

Interest rate on THB 6.03% 8.93%

The correct answer is: 235225

Dashboard | myMurdoch Advice

Question 3
Not answered

Marked out of 2.00

You
have the following quotations on the Chinese yuan (CNY) against the Australian
dollar (A$) at the HSBC Bank in China and
National Australia Bank in Australia.
Can you make a locational arbitrage profit? If yes, calculate the arbitrage
profit if you have
A$1.56 million or CNY3.78 million. (enter the whole number
without sign or symbol)

Currency HSBC in China National Australia Bank in Australia

Bid Ask Bid Ask

Chinese
yuan A$0.2093  A$0.2204  A$0.2407  A$0.2646 

Answer: 

The correct answer is: 143684

Question 4
Not answered

Marked out of 2.00

Wesfarmers has
developed the following probability distribution for the spot rate of the Indian rupee (INR) against the
Australian dollar (A$) in six months to buy call options
on INR1.94 million with an exercise price of A$0.3121 and a premium of
A$0.0317.   

·       A$0.2064 [31 per cent probability]

·       A$0.4554 [38 per cent probability]

·       A$0.5649 [(100-31-38) per cent

probability]
What is the expected value of the cash to be paid in A$ for the call option hedge? (enter the whole number without sign and
symbol)

Answer: 

The correct answer is: 603404

Dashboard | myMurdoch Advice

Question 5
Not answered

Marked out of 2.00

You want you to buy 1.21 million British pounds

(GBP) using call options and foreign exchange market. The following four
figures provide the market information on the GBP options, which expires in 4-month.
How much can you make a net profit or
a net loss for GBP1.21 million if the spot
rate is A$1.3591 at the maturity (i.e., after 4 months)? (enter the whole number
without sign and symbol).

Answer: 

The correct answer is: 24200

Dashboard | myMurdoch Advice

Question 6
Not answered

Marked out of 2.00

Biopharma-Australia can borrow fund

in Australia with an interest rate of 11.34% to invest 1.64 million Chinese yuan
(CNY) and
expected return of CNY2.22 million next year. Assume that
Biopharma-Australia and Haier-China engage in a parallel loan in
which the Haier-China
gives Biopharma Australia CNY1.64 million in exchange for a loan in Australian
dollar (A$) at the current
exchange rate A$0.1992/CNY. These loans will be
repaid by both parties at the end of one year. Assume that next year,
Biopharma-Australia
will pay the Haier-China 14.65% interest on CNY1.64 million and that the Haier-China
will pay Biopharma-
Australia 7.23% interest on the Australian dollar loan.
Also, Biopharma-Australia believes that the CNY will appreciate to
A$0.2990/CNY next year. How much the Biopharma-Australia will make a profit or
loss  in A$ from this parallel loan agreement
in one year.  (enter the whole number with no sign or symbol)

Answer: 

The correct answer is: 88155

Question 7

Not answered

Marked out of 2.00

Travelex Australia provides the following three

exchange rates. You assume that there is a triangular arbitrage profit
opportunity exists based on the following three quotations. Calculate the
arbitrage profit if you have A$1.37 million or MYR2.63
million or CNY3.14 million. (enter the whole number without sing or
symbol).  

Exchange
rates bid
price ask
price

Value of a Chinese yuan (CNY)

in Australian dollars (A$) A$0.2031 A$0.2235

Value of a Malaysian
ringgit (MYR) in Australian dollars (A$) A$0.3078 A$0.3229

Value of a Malaysian ringgit

(MYR) in Chinese yuan (CNY) CNY1.7863 CNY1.9837

Answer: 

The correct answer is: 169277

Dashboard | myMurdoch Advice

Question 8
Not answered

Marked out of 2.00

On 15 January, WA Co., an Australian

company will receive Thai baht (THB) in March from a Thai importer. Therefore, it
sells a
futures contract specifying THB4 million and a March settlement date
(which is 23 March for this contract). On 15 January, the
futures contract is
priced at A$0.2229 per THB. On 14 February, WA Co. has received an email from the
Thai importer that the
order has been cancelled due to unavoidable
circumstances. Therefore, WA Co. no needs to sell a futures contract for THB in
March. It buys a futures contract on THB4 million with the March settlement
date to offset the contract it sold in January. At
this time, the futures
contract is priced at A$0.3038 per THB. Calculate the profit or loss in Australian
dollar (A$) (ignore the
margin requirements) that WA Co. incurs due to closing
its’ March futures contract position. (enter the whole number without
sign and
symbol)

Answer: 

The correct answer is: 323600

Question 9
Not answered

Marked out of 2.00

Haier-China
can borrow fund in China with an interest rate of 11.35% to invest 1.68 million Australian
dollars (A$) and expected
return of A$1.98 million next year. Assume that Haier-China
and Biopharma-Australia engages in a parallel loan in which the
 Biopharma-Australia gives Haier-China A$1.68 million in exchange
for a loan in Chinese yuan (CNY) at the current exchange
rate CNY3.5377/A$.
These loans will be repaid by both parties at the end of one year. Assume that
next year, Haier-China will
pay Biopharma-Australia 14.10% interest on A$1.68 million
and that the Biopharma-Australia will pay Haier-China 7.26%
interest on the Chinese
yuan loan. Also, Haier-China believes that the A$ will depreciate to
CNY3.2227/A$ next year. How much
the Haier-China will make a profit or loss in CNY from
this parallel loan agreement in one year.  (enter the whole number with
no
sign or symbol)

Answer: 

The correct answer is: 39666

Dashboard | myMurdoch Advice

Question 10
Not answered

Marked out of 2.00

An Australian exporter has

supplied goods to India and will receive 2 million Indian rupees (INR) in one
year. The exporter
expects that the INR will be selling at 11.71% discount against the Australian dollar (A$) in the one-year forward contract.  The
spot exchange rate is A$0.2953 and the exporter wants to sell INR2 million in the one-year forward contract. How much
Australian dollar the exporter
will make a loss after one year? (enter the whole number without sign or symbol)

Answer: 

The correct answer is: 69159

Dashboard | myMurdoch Advice

Question 11
Not answered

Marked out of 2.00

You want you to buy 1.15 million British pounds

(GBP) using call options and foreign exchange market. The following four
figures provide the market information on the GBP options, which expires in 4-month.
How much can you make a net profit or
a net loss for GBP1.15 million if the spot
rate is A$1.5462 at the maturity (i.e., after 4 months)? (enter the whole number
without sign and symbol).

Answer: 

The correct answer is: 30130

Dashboard | myMurdoch Advice

Dashboard | myMurdoch Advice
◄ Test/Assignment Questions Instructions/messages

Jump to...

Online Exam Advice for Students ►

Dashboard | myMurdoch Advice