Class Exercise – International FinanceDivision C

Q1. Inverse the following quotes:

1. GBP/USD 1.9525 – 1.9585 USD/CHF = ?

2. USD/CHF 1.1450 – 1.1480 CHF/USD = ?

3. USD/SGD 1.5550 – 1.5590 SGD/USD = ?

4. EUR/USD 1.3455 – 1.3495 USD/EUR = ?

5. USD/CAD 1.0910 – 1.0970 CAD/USD = ?

Q2. Calculate the percentage spread on the following:

1. EUR/SGD 1.6530 – 1.6590

2. EUR/AUD 1.4525 – 1.4575

3. USD/SEK 5.6510 – 5.6580

4. USD/HKD 5.9010 – 5.9080

5. GBP/CHF 2.1530 – 2.1590

Q3. Calculate the following cross currency rates

1. EUR/USD 1.3515 – 1.3585 USD/GBP 0.5110 – 0.5180 EUR/GBP ?

2. CAD/USD 0.8410 – 0.8580 USD/GBP 0.5315 – 0.5385 CAD/GBP ?

3. USD/INR 66.5150 – 66.6790 EUR/INR 76.1090 – 76.1510 EUR/USD ?

4. USD/INR 66.4710 – 66.5110 USD/LKR 140.1190 – 140.4110 INR/LKR ?

5. CAD/EUR 0.6575 – 0.6595 EUR/GBP 0.7035 – 0.7095 CAD/GBP ?

6. CAD/USD 0.8555 – 0.8595 USD/EUR 0.6540 – 0.6590 CAD/EUR ?

7. EUR/USD 1.3515 – 1.3585 USD/GBP 0.5110 – 0.5180 EUR/GBP ?

Q4. Calculate the gains on the below opportunities of two point arbitrage

1. Identify arbitrage if any and compute the gain on a capital of USD 1 millionQuotation 1 – USD/INR 66.4320 – 66.5360Quotation 2 – USD/INR 66.6310 – 66.8515

2. Identify arbitrage if any and compute the gain on a capital of USD 1 millionQuotation 1 – USD/INR 44.6320 – 44.6360Quotation 2 – 100 INR/USD 2.2510 – 2.2515

3. Identify arbitrage if any and compute the gain on a capital of EUR 1 millionQuotation 1 – EUR/INR 74.6320 – 74.7360Quotation 2 – EUR/INR 74.9510 – 74.9980

4. Identify arbitrage if any and compute the gain on a capital of EUR 1 millionQuotation 1 – EUR/INR 74.6320 – 74.7360Quotation 2 – 100 INR/EUR 1.3300 – 1.3320

5. Identify arbitrage if any and compute the gain on a capital of GBP 1 millionQuotation 1 – GBP/INR 104.2320 – 104.5360Quotation 2 – GBP/INR 104.8510 – 104.8980

6. Identify arbitrage if any and compute the gain on a capital of CAD 1 millionQuotation 1 – CAD/INR 64.4320 – 64.5360Quotation 2 – CAD/INR 64.5110 – 64.5580