1. Use information from the table below to calculate the 30-day, 60-day and 180-day discount or
premium for the Mexican peso.
Spot: MXN 1 = $13.3694
30-day forward: MXN 1 = $13.3488
90-day forward : MXN 1 = $13.2219
180-day forward: MXN 1 = $13.1888
2. Use information from the table below to calculate the 30-day, 60-day and 180-day discount or
premium for the euro.
Spot: Euro 1 = $0.7931
30-day forward : Euro 1 = $0.7942
90-day forward: Euro 1 = $0.7943
180-day forward Euro 1 = $0.7948
3. Assuming there are no transaction costs and supposing that £1 = $1.563740 in New York, $1 = €
0.796178 in Paris, and €1 = £0.803199 in London, calculate the arbitrage opportunities that exist based
on these rates. (Briefly show or explain how you arrived at your solutions to get partial credit if one or
more answers are incorrect.)
4. Suppose Microsoft Corporation (Microsoft) receives quotes of $0.012524 (bid) and $0.012526 (ask)
for the yen( ¥) and $0.033540 (bid) and $0.033541 (ask) for the Taiwan dollar (NT$).
a.
a. How many U.S. dollars will Microsoft receive from the sale of ¥60 million?
b. What is the U.S. dollar cost to Microsoft if it buys ¥1.2 billion?
c. How many NT$ will Microsoft receive for U.S. $700, 000?
d. How many yen will Microsoft receive for NT$400 million?
e. What is the yen cost to Microsoft of buying NT$82 million?
5. In a 2-3 page document, discuss reasons that MNCs list their shares on foreign capital markets.
Answers must be presented in a Word document; if there are any calculations done in Excel, copy and
paste them from Excel into the Word document. Make sure the responses are clearly marked so it’s easy
to tell which questions the responses are answering. Written comments must be formatted in
conformity with APA Requirements This assignment should amount to 2-3 pages of text in addition to your responses for questions 1-4
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