3-Spot rate OMR 0.500 = 1 CNY (Chinese Yuan Renminbi). It is expected that CNY may depreciate by 5% after one month. What will be new exchange rate after depreciation? a. OMR 0.475/CNY b. CNY 0.475/OMR c. None of the options d. OMR 0.425/CNY
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- 1. Spot Rate GBP 0.616124 = 1 USD. It is expected that GBP may depreciate by 2% after 15 days. What will be the new exchange rate after fifteen days? 2. Spot rate OMR 0.061666 = 1 CNY = Chinese Yuan Renminbi. It is expected that CNY may depreciate by 3% after one month. What will be new exchange rate after depreciation?Bank one issued $200 million worth of one-year CD liabilities in Brazilian reals at a rate of 6.50 percent. The exchange rate of U.S. dollars for Brazilian reals at the time of the transaction was $0.305/Br 1. a) Is Bank one exposed to an appreciation or depreciation of the U.S. dollar relative to the Brazilian real? b) What will be the percentage cost to Bank one on this CD if the dollar depreciates relative to the Brazilian real such that the exchange rate of U.S. dollars for Brazilian reals is $0.325/Br 1 at the end of the year?T Khan is a U.S.-based investor. Mr. Khan does not believe that the international Fisher effect (IFE) holds. Current one-year interest rates in Singapore are 12 percent, while one-year interest rates in the United States are 8 percent. Khan converts $800,000 to Singapore dollars and invests them in Singapore money market security. One year later, he converts the Singapore dollars back to U.S. dollars. The current spot rate of the Singapore dollar is $.7220. If the spot rate of the Singapore dollar in one year is $.6892, what are Khan’s net profit (or loss) in U.S. dollar and percentage return from his strategy?
- A foreign exchange trader with a U.S. bank took a speculative long position of £6,000,000 when the GBP/USD was 1.3233. Subsequently, the exchange rate has changed to 1.3342. If the position is closed now, what is the profit/loss arising from that trade? (USD, no cents)Pro forma income statement, in won (millions) sales (1,000,000 @ 5,000 won/set)............. 5,000 costs..............................................................(4,000) labor-skilled....................................(1,700) raw materials: imported (duty-free)......................(1,000) local.................................................(500) overhead..........................................(300) interest.............................................(500) profit (before tax) 10%........................1,000 If the won devalues, from w484/$ (won per dollar) to w580/$, recompute ALL VALUES on the statement with the new exchange rate. Assume domestic sales remain the same.Which of these situations will cause the depreciation in the value of the UAE Dirham? a. Increase in the exports of oil and less imports of other things b. Lower exports of oil and an increase in gross domestic product c. Lower exports of oil and a decrease in the gross domestic product d. Increase in the price of oil and increase in exports of minerals and gas
- Assume Turkish lira (TL) is expected to depreciate by 10% over the next year against US dollar. If the Turkish interest rate is15%, what would be the US interest rate that can make a Turkish investor to be willing to buy US securities today? Assume capital is perfectly mobile between Turkey and US.Suppose the demand for dollars (in exchange for euro) is given by the equation: D = 160 + 0.020Y(for) - 550 r(for) + 700r - 28 e(nom) The supply of dollars is given by: S = 80 + 0.022Y + 300r(for) - 640r + 24 e(nom) Suppose output and the real interest rate in the domestic country and the foreign country are: Y = 8,000, Y(for) = 9000, r = 0.060, r(for) = 0.040 Calculate the equilibrium value of the nominal exchange rate. In your calculations, carry out your intermediate steps to three decimals and round your answer to three decimals.A6) Finance Suppose the direct price euros per pound was €1.2115/£ and the exchange rates versus the dollar are €0.7636/$ and $1.5477/£. Is there an arbitrage opportunity?
- 14.1 Lafayette Group (U.S.). The Lafayette Group, a private equity firm headquartered in Boston, borrows £5,000,000 for one year at 7.375% interest. What is the dollar cost of this debt if the pound depreciates from $2.0260 = £1.00 to $1.9460 = £1.00 over the year? What is the dollar cost of this debt if the pound appreciates from $2.0260 = £1.00 to $2.1640 = £1.00 over the year?Dengo Co. expects to receive 50 million INR in each of the next 7 years. It will need toobtain 5 million Mexican pesos in each of the next 7 years. The INR exchange rate ispresently valued at BDT 0.85 and is expected to depreciate by 2 percent each year over time.The peso is valued at BDT 1.13 and is expected to appreciate by 2 percent each year overtime. Review the valuation equation for an MNC. Do you think that the exchange ratemovements will have a favorable or unfavorable effect on the MNC?Let's suppose you have $1 million to invest. You are considering to invest in UK first, then convert the British Pound back to US$ in the future. You know following information: Annual Interest rate on investment in US: 2% Annual Interest rate on investment in UK: 4% Investment period: 1 year Current exchange rate: 1.48 $/BP Forward exchange rate which you can apply when converting BP to US$: 1.47 $/BP What would be profit if you apply the covered-interest arbitrage? Group of answer choices None of the above About $48,382 About $40,542 About $24,254
