1. Currently, you own 10% of the outstanding stock of ABC Company. The company has decided to issue additional shares of stock and has given you the first option to purchase 10% of those additional shares. Which one of the following will you be participating in if you opt to purchase the shares you have been offered? Rights offer Red herring offer Private placement IPO General cash offer
2. Suppose it takes 1.46 U.S. dollars today to purchase one British pound today. Currency forecasters predict that the U.S. dollar will depreciate by 17% against the pound over the next 30 days. What is the U.S. dollar/Euro exchange rate in 30 days? Enter your answer rounded off to FOUR decimal points.
3. Suppose the exchange rate between U.S. dollars and Swiss francs is SF 1.2691 = $1.00, and the exchange rate between the U.S. dollar and the euro is $1.00 = 0.9076 euros. What is the cross-rate of euros to Swiss francs (Euro/SF)? Enter your answer rounded off to FOUR decimal points.
4. Venture capital is most appropriate to be the source of funding for which one of the following? Choose only one Daily operations for an established, profitable firm Bankruptcy reorganization Seasonal production Global expansion for an established, profitable firm New, high-risk venture
5. Suppose one U.S. dollar can purchase 163 yen today. If the yen depreciates by 4% tomorrow, how many yen could one U.S. dollar buy tomorrow? Enter your answer rounded off to two decimal points.
6. Suppose the exchange rate between U.S. dollars and Swiss francs is SF 1.0423 = $1.00, and the exchange rate between the U.S. dollar and the euro is $1.00 = 1.0793 euros. What is the cross-rate of Swiss francs to euros (SF/Euro)? Enter your answer rounded off to FOUR decimal points.
7. You can exchange $1 for either C$1.3872 or ¥133.99. What is the cross rate between the Japanese yen and the Canadian dollar? That is, solve for ¥ per C$. Enter your answer rounded off to two decimal points.
8. Suppose it takes 1.23 U.S. dollars today to purchase one British pound today. Currency forecasters predict that the U.S. dollar will depreciate by 12% against the pound over the next 30 days. What is the Euro/US Dollar exchange rate in 30 days?That is, how many euros can 1 dollar buy in 30 days? Enter your answer rounded off to FOUR decimal points.
9. In New York, you can exchange $1 for €0.8789 or £0.6632. Suppose that, in Berlin, £1 costs €1.188. How much profit can you earn on $31,428 using triangle arbitrage? Enter your answer rounded off to two decimal points