Unit III assessment Question 1 Assess the importance of LIBOR to the world’s financial/credit markets. Your response should be at least 200 words in length. All sources used, including the textbook,...

Unit III assessment

Question 1

Assess the importance of LIBOR to the world’s

financial/credit markets.

Your response should be at least 200 words in length. All

sources used, including the textbook, must be referenced; paraphrased and

quoted material must have accompanying citations.

Question 2

In your own words, relate the importance of a CDS to the

Credit Crisis of 2007-2009.

Your response should be at least 200 words in length. All

sources used, including the textbook, must be referenced; paraphrased and

quoted material must have accompanying citations.

Answer

Question 3

13 out of 15 points

Partial Credit

You are given three exchange rates below, assess (yes/no)

whether an opportunity exists for arbitrage (support your answer with an

explanation).

• 140 Yen/Euro

• 1.22 Euro/CHF (Swiss Franc)

• 184 Yen/CHF

Your response should be at least 100 words in length. All

sources used, including the textbook, must be referenced; paraphrased and quoted

material must have accompanying citations.

Answer

Question 4

11 out of 15 points

Partial Credit

Assume a pair of Nike athletic shoes costs $95.00 (USD), but

since you are a Japanese consumer, you can purchase it for 9,690 Yen. What is

the American quote based on this information?

Your response should be at least 100 words in length. All

sources used, including the textbook, must be referenced; paraphrased and

quoted material must have accompanying citations.

Answer

Question 5

13 out of 15 points

Partial Credit

Assume you are a U.S. citizen and currently you can exchange

$152 (USD) for 114 Euro. What is the direct quote relating the USD to the Euro?

Your response should be at least 100 words in length. All

sources used, including the textbook, must be referenced; paraphrased and

quoted material must have accompanying citations.

Answer

Question 6

13

out of 15 points

Assume you are a U.S. citizen and currently you

can exchange $180 (USD) for 125 GBP (British Pounds). What is the indirect

quote relating the USD to the GBP?

Your response should be at least 100 words in length. All sources used,

including the textbook, must be referenced; paraphrased and quoted material

must have accompanying citations.