FIN 534 RANK Change The World /fin534rank.com FIN 534 RANK Change The World /fin534rank.com | Page 190

Suppose hockey skates sell in Canada for 105 Canadian dollars,
and 1 Canadian dollar equals 0.71 U.S. dollars. If purchasing power
parity (PPP) holds, what is the price of hockey skates in the United
States?
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Question 13
If one Swiss franc can purchase $0.71 U.S. dollars, how many
Swiss francs can one U.S. dollar buy?
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Question 14
2 out of 2 points
Suppose 90-day investments in Britain have a 6% annualized
return and a 1.5% quarterly (90-day) return. In the U.S., 90-day
investments of similar risk have a 4% annualized return and a 1%
quarterly (90-day) return. In the 90-day forward market, 1 British pound
equals $1.65. If interest rate parity holds, what is the spot exchange
rate?
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Question 15
Which of the following statements is NOT CORRECT?
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