Assume Poland’s currency (the zloty) is worth $0.26 and the Japanese yen is worth $0.0065. What is the cross rate of the zloty with respect to the yen? That is, how many yen equal a zloty?

Patrick Bank quotes the following for the British pound and the New Zealand dollar: Quoted Bid PriceQuoted Ask PriceValue of a British pound (£) in $$1.58$1.59Value of a New Zealand dollar (NZ$) in $$0.57$0.58Value of a British pound in  New Zealand dollarsNZ$2.69NZ$2.70Assume you have $30,000 to conduct triangular arbitrage. What is your profit from implementing this strategy?

Refer to the rates below. Travis Corp. will receive 430,000 Jordanian dinar (JOD) in 360 days. The current spot rate of the dinar is $1.58, while the 360-day forward rate is $1.49. How much will Travis receive in 360 days from implementing a money market hedge (assume any receipts before the date of the receivable are invested)? U.S.Jordan360-day borrowing rate5.4%4.2%360-day deposit rate5.1%3.5%

Which of the following is NOT a reason MNCs pursue international business?

Andrew Co. wants to establish a new subsidiary in Mexico that will sell computers to Mexican customers and remit earnings back to the U.S. parent. The value of this project will be favorably affected if the value of the peso ____ while Andrew establishes the new subsidiary and ____ after the subsidiary starts operations.

Christine, Inc. is considering a capital budgeting project in Morocco that requires an initial outlay of 3,170,000 Moroccan dirham. The dirham is currently valued at $0.59 and is expected to remain unchanged for the next two years. In the first and second years of operation, the project will generate 4,000,000 dirham in each year. After two years, Christine will terminate the project and the expected salvage value is 7,800,000 dirham. Christine has assigned a discount rate of 20.9%.There is currently no withholding tax on remittances to the U.S., but there is a 31% chance that the Moroccan government will impose a withholding tax of 25% beginning next year.There is a 63.5% chance that the Moroccan government will pay Christine 6,420,000 dirham after two years instead of the 7,800,000 dirham that it expects.What is the probability that the Moroccan government will impose a 25% withholding tax and pay a salvage of 7,800,000 dirham?

A purely domestic firm that sources and sells only domestically,

Suppose Andrew Co. will not use its existing cash balances in a money market hedge. When deciding between a forward hedge and a money market hedge, it ____ determine which strategy is better, with certainty, today. It ____ determine whether a forward hedge is better than an unhedged strategy, with certainty, today.

Once capital markets are integrated, it is difficult for a country to maintain a fixed exchange rate. Why?

Countries may welcome direct foreign investment if the DFI is viewed as representing:I) new employment opportunities locallyII) increased competition for local firms