Typical Math Problems for the World Finance Examination
1. A eurobond with a face value USD 1,000 is sold in the secondary market at a price of USD
900. The amount of the coupon payment once a year is USD 60. Determine the nominal
yield and the present yield of the eurobond.
2. Rouble appreciated (revalued) 15% against US dollar. How much should rouble devalue
to return to its original level?
3. An investor intends to buy the shares of company X in 3 months. Determine the threemonth forward price of a share of company X, if the current spot price of one share is 110
roubles, and the three-month risk-free interest rate for rouble deposits is 6% per annum.
4. How many francs will the bank sell to a Swiss exporter for 4,000,000 euros if the current
quotes are: EUR/CHF = 1.10–1.15?
5. A British importer arranges settlements with a South African supplier. GBP/ZAR is not
quoted in the market. The importer must exchange pounds for US dollars and then
exchange dollars for rands and pay the amount received to the exporter in South Africa.
The following quotes of currency pairs are known: GBP/USD = 1.65; USD/ZAR = 7.45.
At what rate can one pound be exchanged for rands?
6. As of October 1, 2020, EUR/USD = 1.12, and as of December 1, 2020, EUR/USD = 1.09.
Determine how much euro has changed against dollar and how many percent has changed
dollar against euro over this period, as well as which currency was revalued and which was
devalued.
7. An English tourist is about to go to Moscow. He wants to buy 100,000 roubles for pounds
sterling. RUR/GBP is not quoted in the market. The tourist must exchange pounds sterling
for US dollars in an English bank, and then exchange dollars for roubles. The following
quotes of currency pairs are known: GBP/USD = 1.6; USD/RUR = 64.0. How many
pounds sterling will an English tourist spend to buy 100,000 roubles?
8. An investor is going to buy the shares of company Z in one month, so he wants to enter
into a forward contract, fearing an increase in the market price of the shares of this
company. Determine the forward price of a share of company Z, if the current spot price
of one share is 100 roubles, and the one-month risk-free interest rate for rouble deposits is
8% per annum, and determine whether the purchase of a forward contract turned out to be
profitable if in a month the spot price of one share was RUR 100.25.
9. A Russian bank has given the current quotes USD/RUR = 62.50-66.50. How many dollars
can a Russian importer buy for 30,000,000 roubles?
10. Determine if hedging for 3 months was profitable for the Russian exporter if on the day of
hedging USD/RUR spot rate was 64.00, after 90 days it was 65.00, and the 3-month
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interbank market interest rates on the day of hedging were 5% for dollar, and 10% for
rouble.
11. An American tourist is traveling in Europe and wants to exchange US dollars for euros.
The bank provides the following quotes: EUR/USD = 1.10-1.15. How many dollars will a
tourist lose because of the exchange rate spread if he exchanges 10,000 dollars for euros
and then exchanges euros back for dollars?
12. Rouble depreciated (devalued) by 20% against US dollar. By what percentage should
rouble be revalued to return to its original level?
13. An investor is going to buy the shares of company Y in a month. Determine the one month
forward price of a share of company Y if the current spot price of one share is 100 roubles,
and one month risk-free interest rate for rouble deposits is 5% per annum.
14. As of October 1, 2020, EUR/USD = 1.2, and as of December 1, 2020, EUR/USD = 1.1.
Determine how much euro has changed against dollar and how many percent has changed
dollar against euro over this period, as well as which currency was revalued and which was
devalued.
15. Three years left until the maturity date of the zero-coupon eurobond with a par (face) value
of USD 500. The market rate of return (present yield) is 9%. Determine its present value.
16. How many francs will the bank sell to a Swiss exporter for 1,000,000 euros if the current
quotes EUR/CHF are 1.15–1.20?
17. A British importer settles accounts with a Swedish supplier. GBP/SEK is not quoted in the
market. The importer must exchange pounds for US dollars and then exchange dollars for
Swedish kronor and pay the amount received to the exporter from Sweden. The following
quotes of currency pairs are known: GBP/USD = 1.6; USD/SEK = 5.5. At what rate can
one pound be exchanged for Swedish kronor?
18. A Russian bank has given the following quotes: USD/RUR = 62.0–66.0. A Russian
importer wants to hedge against the growth of dollar and buy dollars in the forward market
to pay for the goods, which will arrive in 3 months. Determine the 3-month forward rate if
the 3-month risk-free interest rates for dollar are 4% and for rouble - 12% per annum.
19. How many dollars will the American importer spend to buy 2,000,000 yen if the bank has
given the following quotes: USD/JPY = 100.0-105.0?
20. Determine RUR/GBP if the following quotes of two currency pairs are known: GBP/USD
= 1.6; USD/RUR = 64.0.
21. If there was a 40% devaluation of the Mexican peso against US dollar, how many percent
would peso have to revalue to return to its original level?
22. As of September 1, 2020, EUR/USD = 1.12, and as of December 1, 2020, EUR/USD =
1.08. Determine by what percentage USD/EUR has changed over this period and in which
direction (revaluation or devaluation).
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23. A eurobond with a face value USD 500 is sold in the secondary market at a price of USD
450. The amount of the coupon payment once a year is USD 20. Determine the nominal
yield and present yield of the eurobond.
24. A market maker has given the current quotes EUR/USD = 1.0800-50. How many euros
should an American importer buy for USD 1,000,000?
25. A Russian bank has given the following quotes: EUR/RUR = 71.2500-50. How many
roubles will a Russian tourist spend to buy 2,000 euros?
26. Determine if hedging for 1 month turned out to be profitable for the Russian exporter if on
the day of hedging the spot rate USD/RUR was 64.0, after 30 days it was 64.5, and one
month interest rates of the interbank market on the day of hedging were 4% for dollar, and
9% for rouble.
27. USD/RUR is 64.0. A Russian importer wants to hedge against dollar rise and buy dollars
in the forward market to pay for the goods which will arrive in 90 days. 3-month interbank
market interest rates for dollar are 5%, and for rouble - 10%. Determine what the forward
rate should be in 90 days.
28. Euro depreciated against US dollar by 10%. By what percentage should euro be revalued
in order to return to the original level?
29. As of October 1, 2020, USD/RUR = 62.0, and as of December 1, 2020, USD/RUR = 64.0.
Determine by how many percent rouble exchange rate has changed over this period and in
which direction (revaluation or devaluation).
30. A Russian tourist is about to travel to London. He wants to buy pounds sterling, spending
100,000 roubles. RUR/GBP is not quoted in the market. The tourist must exchange roubles
for US dollars at a Russian bank, and then exchange dollars for pounds sterling. The
following quotes of currency pairs are known: GBP/USD = 1.6; USD/RUR = 64.0. How
many pounds can a tourist buy for 100,000 roubles?
31. A Russian tourist is about to travel to London. He wants to know how many roubles will
have to be spent to buy £ 1,000. GBP/RUR is not quoted in the market. The tourist must
exchange roubles for US dollars at a Russian bank, and then exchange dollars for pounds
sterling. The following quotes of currency pairs are known: GBP/USD = 1.6; USD/RUR =
64.0. How many roubles will a tourist spend to buy £ 1,000?
32. An English importer buys goods in Australia. GBP/AUD is not quoted in the market. The
British exporter must exchange pounds sterling for US dollars at his bank, then exchange
US dollars for Australian dollars and pay the amount received to the exporter from
Australia. The following quotes of currency pairs are known: GBP/USD = 1.65; AUD/USD
= 1.15. At what rate can one pound sterling be exchanged for Australian dollars?
33. Two years left until the maturity date of the USD 10,000 zero-coupon eurobond. The
market rate of return (present yield) is 8%. Determine its present value.
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