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?
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- DER for USA of Commodities Wheat Bushel & Cloth Yards is 12W = 8C DER for UK of Commodities Wheat Bushel & Cloth Yards is 2W = 4C What would be the gains from trade for UK given the international Exchange Rate IER is 12W = 12 C Select one: 8C 10C 12C 6C 4CA German sports car is selling for €65,000. What is thedollar price in the United States for the German car ifthe exchange rate is 0.80 euro per dollar?An iPhone 13 costs $600 in the United States. Today, forex exchange rates were identified at:· S1 = €2.25· €1 = P43What should be the price of the same iPhone 13 in Philippines, assuming that the currency markets are efficient and purchasing power parity holds?
- Pro forma income statement, in won (millions) sales (1,000,000 @ 5,000 won/set)............. 5,000 costs..............................................................(4,000) labor-skilled....................................(1,700) raw materials: imported (duty-free)......................(1,000) local.................................................(500) overhead..........................................(300) interest.............................................(500) profit (before tax) 10%........................1,000 If the won devalues, from w484/$ (won per dollar) to w580/$, recompute ALL VALUES on the statement with the new exchange rate. Assume domestic sales remain the same.If the same basket of goods costs $120 in the United States and €100 in Europe, what would .the purchasing power parity theory’s prediction of the dollar/euro exchange rate be? a. $1- €0.20 b. $1- €0.80 c. $1- €0.83 d. $1- €1.10 e. $1- €1.20Suppose that today is 1st January 2022, Anthony Tan is interested in hiring a software engineer from Malaysia for his company Grab in the United States by using a 3-month short-term contract to control and monitor the mobile app development. The current exchange rate between US Dollars and Malaysian Ringgit (RM) is:1 USD equals RM 4.12. (i) What should Anthony Tan do to manage the international exposure from operational, if, in March 2022, the exchange rate is 1 USD = RM 4.25? (ii) What should Anthony Tan do to manage the international exposure from operational, if, in June 2022, the exchange rate is USD 1 = RM 3.98?
- A UK-manufactured car sells for GBP 14.000. A french-manufactured car sells for EUR 15.750. If the EUR/GBP exchange rate changes from 1.17 to 1.09, what is the percentage change in the price of the french car in GBP? a. -6.8% b. -7.3% c. 6.8% d. 7.3%Assume the annual interest rate on a British pound-denominated asset maturing in 90 days is 7.5 percent. The annual interest rate on a dollar-denominated asset maturing in 90 days is 4.2 percent. ( 90 days is approximately one-quarter of a year!) Engo Company, a U.S. firm, wants to spend $12,000,000 to buy the pound-denominated asset or the dollar-denominated asset. The spot exchange rate is $1.24 per pound and the 90-day forward exchange rate is $1.235 per pound. Which asset would Engo Company prefer?Suppose that Nevada Co., a US MNC, sold consulting services to Primedia, a company based in Belarus, for 750 rubles. At the time of the transaction, the prevailing exchange rate was $0.45. If Nevada Co's bank does not desire to hold such a large amount of rubles, which of the following exchange rates might they be willing to accept when Nevada Co. seeks to exchange the rubles for dollars? A. $0.54 B. $0.43 C. $0.47 D. $0.50
- The demand for Australian dollars in the foreign exchange market equals 14000 – 3000e and thesupply of Australian dollars in the foreign exchange market equals 2000 + 2000e, where e is thenominal exchange rate expressed in euros per Australian dollar. If the Australian dollar is fixed at 2euros per Australian dollar, then to maintain this fixed rate, what is the required change in theReserve Bank of Australia’s holdings of euros? 1increase by 4000 euros 2decrease by 2000 euros 3decrease by 4000 euros 4increase by 2000 eurosAfter considering investing foreign investment in the recommended countries, what sort ofexchange rate risk DAMC may face. In your explanations give some historical trends of exchange rates of AUD vs currency of your selected countries and how do you forecast such exchange rates to be in short-term and medium-term future? currencies are brazilian real and mexican pesoTrue or false For South Africa, an exchange if R9/$ is equivalent $0.11/R by the direct method of stating an exchange rate in South Africa. Explain either way.
