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Suppose 144 yen could be purchased in the foreign exchange
market for one U.S. dollar today. If the yen depreciates by 8.0%
tomorrow, how many yen could one U.S. dollar buy tomorrow?
Question 3
Suppose one British pound can purchase 1.82 U.S. dollars today
in the foreign exchange market, and currency forecasters predict that the
U.S. dollar will depreciate by 12.0% against the pound over the next 30
days. How many dollars will a pound buy in 30 days?
Answer
Question 4
Suppose 6 months ago a Swiss investor bought a 6-month U.S.
Treasury bill at a price of $9,708.74, with a maturity value of $10,000.
The exchange rate at that time was 1.420 Swiss francs per dollar.
Today, at maturity, the exchange rate is 1.324 Swiss francs per dollar.
What is the annualized rate of return to the Swiss investor?
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Question 5