1. A US firms UK Subsidiary borrowed £1,000,000 three years ago that it must now repay. The spot exchange rate was £.75/$ when the money was borrowed however the dollar has since appreciated to £.85/$. What has been the change in the dollar cost of repaying this loan?
A. A Reduction of $156,862
B. A Increase of $156,862
C. A Reduction of $100,000
D. A Increase of $100,000
2. Suppose the following direct quotes are received for spot and one-month Swiss francs in New York: .1160-68 and 6-4. Then the outright 30-day forward quote for the Swiss francs is....
A. .1156-62
B. .1164-74
C. .1166-72
D. .1154-64