You are a foreign exchange trader specialized in the US dollar (USD) and Canadian dollar (CAD) market (CAD/USD). One morning, you find the following…

You are a foreign exchange trader specialized in the US dollar (USD) and Canadian dollar (CAD) market (CAD/USD). One morning, you find the following two CAD/USD quotes: Quote A: 1.03–1.035 and Quote B: 1.038 – 1.042 Quotes are read as: (bid price (buy price) – ask price (sell price) (i) Can you make money from these quotes, how and why? What will happen to the forex market rate CAD/USD if you continue trading with your strategy? (ii) Another morning, you notice that the one-year US dollar interest rate is 4%, while the one-year interest rate on CAD deposits is 2.7%. Today’s CAD/USD rate is $1.7. What spot rate do you expect for the CAD/USD in one year? (iii) You log onto your electronic brokerage account and find that the current quote for the 360-day forward rate on CAD/USD is 1.0459. Is there an arbitrage opportunity? If so, describe how you would take profit from it and how much you would get if you invested $1. What do you anticipate if all of your fellow traders start doing the same?

Show more







Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10