Assume that the level of capital flows between the United States and the country of Zeus is negligible (close to zero) and will continue to be negligible. A substantial amount of trade takes place between the United States and the country of Zeus. The main import by the United States is basic clothing purchased by U.S. retail stores from Zeus, whereas the main import by Zeus is special computer chips that are made only in the United States and are needed by many manufacturers in Zeus. Suddenly, the U.S. government decides to impose a 20 percent tax on the clothing imports. The Zeus government immediately retaliates by imposing a 20 percent tax on the computer chip imports. Second, the Zeus government immediately imposes a 60 percent tax on any interest income that would be earned by Zeus investors if they buy U.S. securities. Third, the Zeus central bank raises its local interest rates so that they are now higher than interest rates in the United States. Do you think the currency of Zeus (the zee) will appreciate or depreciate against the dollar as a result of all these government actions? Explain.
> The following information is currently available for Canadian dollar (C$) options (see Appendix B in this chapter): Put option exercise price 5 $0.75. Put option premium 5 $0.014 per unit. Call option exercise price 5 $0.76. Call option premium 5 $0.
> Refer to the previous question, but assume that the call and put option premiums are $0.035 per unit and $0.025 per unit, respectively. (See Appendix B in this chapter.) a. Construct a contingency graph for a long pound strangle. b. Construct a continge
> Assume the following options are currently available for British pounds (£): Call option premium on Britishpounds 5$0.04 perunit. Put option premium on British pounds5$0.03 perunit. Call option strike price $ 5 1.56. Put option strike price $ 5 1.53.
> Maggie Hawthorne is a currency speculator. She has noticed that recently the euro has appreciated substantially against the U.S. dollar. The current exchange rate of the euro is $1.15. After reading a variety of articles on the subject, Maggie believes t
> Differentiate between a currency call option and a currency put option.
> The current spot rate of the Singapore dollar (S$) is $0.50. The following option information is available: Call option premium on Singapore dollar (S$) $ 5 0.015. Put option premium on Singapore dollar (S$) $ 5 0.009. Call and put option strike price $
> Refer to the previous question, but assume that the call and put option premiums are $0.02 per unit and $0.015 per unit, respectively. (See Appendix B in this chapter.) a. Construct a contingency graph for a long euro straddle. b. Construct a contingency
> Reska, Inc., has constructed a long euro straddle. A call option on euros with an exercise price of $1.10 has a premium of $0.025 per unit. AÂ euro put option has a premium of $0.017 per unit. Some possible euro values at option expiration are
> During the Asian crisis, the currencies of many Asian countries declined even though their governments attempted to intervene with direct intervention or by raising interest rates. Given that the abrupt depreciation of the currencies was attributed to an
> Myrtle Beach Co. purchases imports that have a price of 400,000 Singapore dollars, and it has to pay for the imports in 90 days. It can purchase a 90-day forward contract on Singapore dollars at $0.50 or purchase a call option contract on Singapore dolla
> One year ago, you sold a put option on 100,000 euros with an expiration date of one year. You received a premium on the put option of $0.04 per unit; the exercise price was $1.22. Assume that one year ago, the spot rate of the euro was $1.20, the one-yea
> Currency futures markets are commonly used as a means of capitalizing on shifts in currency values, because the value of a futures contract tends to move in line with the change in the corresponding currency value. Recently, many currencies have apprecia
> A U.S. professional football team plans to play an exhibition game in the United Kingdom next year. Assume that all expenses will be paid by the British government, and that the team will receive a check for 1 million pounds. The team anticipates that th
> Bulldog, Inc., has sold Australian dollar put options at a premium of $0.01 per unit, and an exercise price of $0.76 per unit. It has forecasted the Australian dollar’s lowest level over the period of concern as shown in the following t
> Bama Corp. has sold British pound call options for speculative purposes. The option premium was $0.06 per unit, and the exercise price was $1.58. Bama will purchase the pounds on the day the options are exercised (if the options are exercised) to fulfill
> Auburn Co. has purchased Canadian dollar put options for speculative purposes. Each option was purchased for a premium of $0.02 per unit, with an exercise price of $0.86 per unit. Auburn Co. will purchase the Canadian dollars just before it exercises the
> How can corporations use currency futures? b. How can speculators use currency futures?
> LSU Corp. purchased Canadian dollar call options for speculative purposes. If these options are exercised, LSU will immediately sell the Canadian dollars in the spot market. Each option was purchased for a premium of $0.03 per unit, with an exercise pric
> Assume that a March futures contract on Mexican pesos was available in January for $0.09 per unit. Also assume that forward contracts were available for the same settlement date at a price of $0.092 per peso. How could speculators capitalize on this situ
> Why do you think the depreciation of the Asian currencies adversely affected U.S. firms? (There are at least three reasons, each related to a different type of exposure of some U.S. firms to exchange rate risk.)
> Assume that on November 1, the spot rate of the British pound was $1.58 and the price on a December futures contract was $1.59. Assume that the pound depreciated during November so that by November 30 it was worth $1.51. a. What do you think happened to
> Assume that the transactions listed in the first column of the following table are anticipated by U.S. firms that have no other foreign transactions. Place an “X” in the table wherever you see possible ways to hedge ea
> Assume that the euro’s spot rate has moved in cycles over time. How might you try to use futures contracts on euros to capitalize on this tendency? How could you determine whether such a strategy would have been profitable in previous periods?
> What are the advantages and disadvantages to a U.S. corporation that uses currency options on euros rather than a forward contract on euros to hedge its exposure in euros? Explain why an MNC might use forward contracts to hedge committed transactions and
> Brian Tull sold a put option on Canadian dollars for $0.03 per unit. The strike price was $0.75, and the spot rate at the time the option was exercised was $0.72. Assume Brian immediately sold the Canadian dollars received when the option was exercised.
> Mike Suerth sold a call option on Canadian dollars for $0.01 per unit. The strike price was $0.76, and the spot rate at the time the option was exercised was $0.82. Assume Mike did not obtain Canadian dollars until the option was exercised. Also assume t
> Alice Duever purchased a put option on British pounds for $0.04 per unit. The strike price was $1.80,and the spot rate at the time the pound option was exercised was $1.59. Assume there are 31,250 units in a British pound option. What was Alice’s net pro
> Randy Rudecki purchased a call option on British pounds for $0.02 per unit. The strike price was $1.45, and the spot rate at the time the option was exercised was $1.46. Assume there are 31,250 units in a British pound option. What was Randy’s net profit
> Compare and contrast forward and futures contracts
> Assume that substantial capital flows occur among Canada, the United States, and Japan. If the interest rate in Canada declines to a level below the U.S. interest rate, and inflationary expectations remain unchanged, how could this affect the value of th
> Why do you think the values of bonds issued by Asian governments declined during the Asian crisis? Why do you think the values of Latin American bonds declined in response to the Asian crisis?
> What factors affect the future movements in the value of the euro against the dollar?
> Explain why a public forecast by a respected economist about future interest rates could affect the value of the dollar today. Why do some forecasts by well-respected economists have no impact on today’s value of the dollar?
> What is the expected relationship between the relative real interest rates of two countries and the exchange rate of their currencies?
> Assume that the Japanese government relaxes its controls on imports by Japanese companies. Other things being equal, how should this affect (a) the U.S. demand for Japanese yen, (b) the supply of yen for sale, and (c) the equilibrium value of the yen?
> Assume that the U.S. income level rises at a much higher rate than does the Canadian income level. Other things being equal, how should this affect (a) the U.S. demand for Canadian dollars, (b) the supply of Canadian dollars for sale, and (c) the equi
> The New Zealand dollar’s spot rate was equal to $0.60 last month. New Zealand conducts much international trade with the United States, but the financial (investment) transactions between the two countries are negligible. Assume the following conditions
> The country of Neeland has stable and predictable international trade flows with the United States. Neeland periodically makes the news because its government might have problems repaying its debt owed to local banks. The value of its currency (the “nee”
> The country of Vezot has massive capital flows with the United States because it has no restrictions on the movement of investment funds into or out of the country. Its inflation rate just increased substantially, while the U.S. inflation rate remains un
> The country of Zars has large capital flows with the United States. It has no trade with the United States and will not have trade with the United States in the future. Its interest rate is 6 percent, the same as the U.S. interest rate. Its rate of infla
> The country of Quinland has large capital flows with the United States. It has no trade with the United States and will not have trade with the United States in the future. Its interest rate is 6 percent, the same as the U.S. interest rate. You expect th
> During the Asian crisis, Hong Kong and China successfully intervened (by raising their interest rates) to protect their local currencies from depreciating. Nevertheless, these countries were also adversely affected by the Asian crisis. Why do you think t
> Here are exchange rates for the Japanese yen and British pound at the beginning of each of the last five years. Your firm wants to determine which currency is more volatile as it assesses its exposure to exchange rate risk. Estimate the volatility of eac
> Assume U.S. interest rates fall relative to British interest rates. Other things being equal, how should this affect (a) the U.S. demand for British pounds, (b) the supply of pounds for sale, and (c) the equilibrium value of the pound?
> Last year a dollar was equal to 7 Swedish kronor, and a Polish zloty was equal to $0.40. Today, the dollar is equal to 8 Swedish kronor, and a Polish zloty is equal to $0.44. By what percentage did the cross exchange rate of the Polish zloty in Swedish k
> Assume that inflation is zero in the United States and in Europe and will remain at zero. U.S. interest rates are presently the same as in Europe. Assume that economic growth in the United States is presently similar to that occurring in Europe. Assume t
> Assume you want to determine whether the monthly movements in the Polish zloty against the dollar are more volatile than the monthly movements in some other currencies against the dollar. The zloty was valued at $0.4602 on May 1, $.4709 on June 1, $0.488
> Kurnick Co. expects that the pound will depreciate from $1.70 to $1.68 in one year. It has no money to invest, but it could borrow money to invest. A bank allows the company to borrow either $1 million or £1 million for one year. Kurnick can borrow dolla
> The country of Luta has large capital flows with the United States. It has no trade with the United States and will not have trade with the United States in the future. Its interest rate is 6 percent, the same as the U.S. interest rate. Its rate of infla
> You reside in the United States and are planning to make a one-year investment in Germany during the next year. Because the investment is denominated in euros, you want to forecast how the euro’s value may change against the dollar over the one-year peri
> Assume that the level of capital flows between the United States and the country of Krendo is negligible (close to zero) and will continue to be negligible. In contrast, a substantial amount of trade occurs between the United States and the country of Kr
> In most cases, a weak local currency is expected to stimulate the local economy. Yet, it appeared that the weak currencies of Asian countries adversely affected their economies. Why do you think the weakening of the home currencies did not initially impr
> Was the depreciation of the Asian currencies during the Asian crisis due to trade flows or capital flows? Why do you think the degree of movement over a short period may depend on whether the reason is trade flows or capital flows?
> Define a) Isocratic elution. b) Gradient elution. c) Normal-phase packing. d) Reversed-phase packing. e) Bonded-phase packing f) Chiral chromatography. g) Ion-pair chromatography. h) Eluent-suppressor column. i) Gel filtration. j) Gel permeatio
> List the types of substances to which each of the following chromatographic methods is most applicable: a) Gas-liquid. b) Liquid-liquid. c) Ion. d) Adsorption. e) Gel permeation. f) Affinity. g) Chiral.
> An HPLC method was developed for the separation and determination of ibuprofen in rat plasma samples as part of a study of the time course of the drug in laboratory animals. Several standards were chromatographed and the following results obtained: Next
> Two components in an HPLC separation have retention times that differ by 22 s. The first peak elutes in 10.5 minutes, and the peak widths are approximately equal. The void time, tM, was 63 s. Use a spreadsheet to find the minimum number of theoretical pl
> Although temperature does not have nearly the effect on HPLC separations that it has on GC separations, it nonetheless can play an important role. Discuss how and why temperature might or might not influence the following separations: a) A reversed-phas
> The ideal detector for GC is described in Section 30A-4. Which of the eight characteristics of an ideal GC detector are applicable to HPLC detectors? What additional characteristics would be added to describe the ideal HPLC detector?
> Which of the GC detectors in Table 30-1 are suitable for HPLC? Why are some of these unsuitable for HPLC? Table 30-1:
> Mass spectrometry is an extremely versatile detection system for gas chromatography. Describe the major reasons why it is more difficult to combine HPLC with mass spectrometry than it is to combine GC with mass spectrometry.
> Describe the differences between single-column and suppressor-column ion chromatography.
> Describe two types of pumps used in HPLC. What are the advantages and disadvantages of each?
> Why are fragments often produced with electron ionization?
> What is the major difference between isocratic elution and gradient elution? For what types of compounds are these two elution methods most suited?
> What types of species can be separated by GC but not by HPLC?
> Describe the difference between gel-filtration and gel-permeation chromatography.
> Describe the fundamental difference between ion exchange and size-exclusion chromatography.
> Describe the fundamental difference between adsorption and partition chromatography.
> Indicate the order of elution of the following compounds from a normal-phase packed HPLC column: a) Ethyl acetate, acetic acid, dimethylamine. b) Propylene, hexane, benzene, dichlorobenzene.
> What kind of mixtures are separated by gas-solid chromatography?
> Why is gas-solid chromatography not used as extensively as gas-liquid chromatography?
> How do gas-liquid and gas-solid chromatography differ?
> For the data given in Example 30-1, compare the method of external standards to the internal standard method. Plot the analyte peak height versus percent analyte, and determine the unknown without using the internal standard results. Are your results any
> How do electron and electrospray ionization sources differ? What are the advantages and disadvantages of each?
> Peak areas and relative detector responses are to be used to determine the concentration of the five species in a sample. The area normalization method described in Problem 30-20 is to be used. The relative areas for the five gas chromatographic peaks ar
> One method for quantitative determination of the concentration of constituents in a sample analyzed by gas chromatography is the area normalization method. In this method, complete elution of all the sample constituents is necessary. The area of each pea
> List the variables that lead to a) Band broadening b) Band separation in gas-liquid chromatography.
> What is the effect of stationary phase film thickness on gas chromatograms?
> What are the advantages of fused-silica capillary columns compared with glass or metal columns?
> What properties should the stationary phase liquid for gas chromatography possess?
> Why are gas chromatographic stationary phases often bonded and cross-linked? What do these terms mean?
> How do the following capillary columns differ? a) PLOT columns b) WCOT columns c) SCOT columns
> What are megabore open tubular columns? Why are they used?
> What are hyphenated gas chromatographic methods? Briefly describe three hyphenated methods.
> Why are detection limits for ICPMS often lower with double-focusing mass spectrometers than with quadrupole mass spectrometers?
> What are the principal advantages and the principal limitations of each of the detectors listed in Problem 30-10? Detectors listed in Problem 30-10: a) Thermal conductivity, b) Flame ionization, c) Electron capture, d) Thermionic, e) Photoionization.
> Describe the principle on which each of the following GC detectors are based: a) Thermal conductivity, b) Flame ionization, c) Electron capture, d) Thermionic, e) Photoionization.
> What is meant by temperature programming in gas chromatography?
> What variables must be controlled if satisfactory qualitative data are to be obtained from chromatograms?
> Describe the physical differences between capillary and packed columns. What are the advantages and disadvantages of each?
> What is meant by temperature programming in gas chromatography?
> Describe a chromatogram, and explain what type of information it contains.
> Explain how you would use one of the flow meters in Figure 30-2. Figure 30-2:
> How do strong- and weak-acid synthetic ion-exchange resins differ in structure?
> Define a) Elution. b) Eluent. Diffusion. c) Stationary phase. d) Distribution constant. e) Retention time. f) Longitudinal g) Selectivity factor. h) Plate height.
> What are the requirements of an internal standard in ICPMS?
> Name three methods based on mechanical phase separation.
> What does the term salting out a protein mean? What is the salting in effect?
> What does the term salting out a protein mean? What is the salting in effect?
