Question

assume el Belete: Attempt 1 Question 16 (1 point) Assume it is June 1, 2016 and the exchange rate for U.S. dollars and British pounds is approximately $1.00 = £0.70. You are a currency speculator. Somehow you know that on June 23, 2016, the British will vote to approve Brexit, removing the U.K. from the European Union. Suppose you also know that about week after the vote, on July 1, 2016, the exchange rate for U.S. dollars and British pounds will have increased to approximately $1.00 = £0.82. In your portfolio (on June 1). you have $1,000,000 in dollars and £1,000,000 in pounds with which to speculate. Your intent is to profit from currency speculation. Using the money in your portfolio to make currency trades on June 1 and on July 1, calculate how much profit you could make in dollars. Provide your answer in U.S. dollars rounded to one decimal place. Use a negative sign " for negative values. Do not include any symbols, such as "$," "=,"%," or "," in your answer. Your Answer: Answer Question 17 (1 point) The exchange rate today $1.00 = €0.85. You are a currency speculator. Suppose you have $1,000,000 in dollars and 1,000,000 in euros in your portfolio and you believe the dollar will depreciate in value versus the euro (€). Suppose you know in one week the exchange rate will be $1.00 = €0.76. Your intent is to profit from currency speculation. Using the money in your portfolio to make currency trades, calculate how much profit you could make in dollars. Provide your answer in U.S. dollars rounded to one decimal place. Use a negative sign "-" for negative values. Do not include any symbols, such as "$." "," "%," or "." in your answer. Your Answer: Answer MacBook Air 000 F10 F8 F9 F6 F3

Answer 1

Solution P.16 Given that British pound is approximately $ 1.00 – £0.70 iOne Euro = $ 1.00 0.70 fe $ 1.4285714. loss for dollar 1,000,000 - 700,000 there would loss of $ 3,090 00 : The Profita 3,00,000 x 1.4285714 = 428571,428514286 ~ 42857142. for Eurols If we trade at exchange rate 0.82 The Profit for Eurds currency would be one Euro = $ 1.00 0.82 - $ 1.219512) loss for dollar would be - 1,000,000 - 820,000 = 180,000 9. US dollar - F 0.82 at net profit would be 428576.42 -180,000 = 248571.42. The answer is 24857164] 1 .

Q.17 Given that The exchange rate today $1.00 € 085 exchange rate after I week = 1 dollar = 0.76 Euros Po getting profit , ato trader should buy dollars at price 1 dollar = 0.85 euro's 1 euro = $uss = 1.17647 And sell at seuro = $ bose 0.76 - 1.31578 1.31578- 117647 The profit = E 0.13931 This would give a profit of 13.93 percent = 1.31528-1.17647 1017647 0.11841855 The ansever iş 0.1184)