For the below questions use these rates that your bank has quoted you: EUR/USD:        1.0175 – 1.0180 GBP/USD:        1.2065 – 1.2070 USD/CAD:        1.2930 – 1.2935 USD/JPY:          134.85 – 134.90 AUD/USD:        .6905 - .6910   Calculate the following crosses: GBP/CAD   GBP/JPY   CAD/JPY

Q: the price process for the S&P/T 90, interest rates = 5% and pays no dividends. stock index has u =…

A: Binomial  tree is very important concept in the call option and put option pricing and this is very…

Q: China has a fixed rate regime. They keep their currency in terms of trade, fixed against the US…

A: Economy refers to the state or country in which the production of goods or services is to be done.…

Q: Which of the following(s) would be ways to reject the CAPM?   a   showing that there exist a stock…

A: CAPM is calculated with the formula below:Return on stock = Risk free rate + Beta (Market return -…

Q: Let’s pretend that we buy an annuity at the age of 70 with how much money we have in total from our…

A: Given: Value of the annuity “P” = $1368506.12 Interest rate = 5% Per month rate “r” = 5%/12 Number…

Q: key factors involved in establishing a dividend policy

A: A dividend policy is the dividend distribution criteria established by a company's board of…

Q: A new diamond deposit has been found in northern Alberta. Your researchers have determined that it…

A: We will have to determine the NPV of all cash flows associated with this diamond deposit. If NPV of…

Q: Based on the rule of 72, what per annum interest rate must a person earn on their savings to double…

A: Time for investment to double = 13 years  Per annum interest rate = ?   Rule of 72 is the rule to…

Q: A database marketing firm can lease its computer equipment with beginning-of-quarter payments of…

A: Quarterly lease payment (Q) = $10,000 Loan amount (L) = $131,200 Resale value (Z) = $33,000…

Q: BBC issues $4,000,000 perpetual debt that pays 12% annual coupon. The yield of the debt is 12% now.…

A:

Q: The engineering team at Manuel's Manufacturing, Inc., is planning to purchase an enterprise resource…

A: The NPV analysis provides the investor with information regarding the profitability of the project.…

Q: In how many months will P10,000 earn a compound interest of P2,000 if money is worth 12% compounded…

A: To calculate the number of months we will use the below formula   CI = [P*(1+r)n]-P Where CI -…

Q: odaFizz paid a dividend of $2 per share last year; its dividend has been growing at a rate of 2% per…

A: The dividend is paid to equity shareholders as a share in the profit. The dividends are the amount…

Q: Harper Engine Company needs $687,000 to take a cash discount of 1.50/15, net 70. A banker will loan…

A: The cash discount can be availed if the company pays the loan within the specified period, for…

Q: How much will Spike have in his account if he invests $855 for 4 years, compounded semiannually at…

A: We need to use compound interest formula to calculate amount after 4 years in account. A=P(1+i)n…

Q: 1. Latona Hitchens purchases 25 hanging file folders for $6.9

A: Unit price is the price per unit of a product being purchased. In other words it is the per piece…

Q: o raise funds for improvements by issuing 51⁄2 % bonds. There is P 20,000 available per year for…

A: Price of bond is the present value of annual interest payments and present value of redemption value…

Q: Deli Bhd introduces a new product line to expand its market in gaining wide market shares. Deli Bhd…

A: The initial cost of investment = capital investment + working capital investment = 1,500,000 +…

Q: Find the present value of a twenty-year temporary life annuity issued to (45) which provides for…

A: Present value of future amount With future value (FV), discount rate (r) and period (n), the present…

Q: Sally plans to make continuous deposits to a savings account. She wants to accumulate $40,000 in 10…

A: Annual payment refers to the amount paid on annual basis for a specific period of time on which…

Q: Tom O'Brien has a 2-stock portfolio with a total value of $100,000. $55,000 is invested in Stock A…

A: Given: Total value =$100,000 Invested in stock A = $55,000 Stock A Beta = 0.75 Stock B beta = 1.79

Q: Debt will always have a cost basis. that is less than equity. OA. True OB. False

A: Debt - Debt is referred to as the amount of money that is borrowed by one party from another and is…

Q: 3) Finance how do I find and compute the equity value of LOW (Lowes) stock?

A: Lowe's  is an  American retail company. It specializes in home improvement.

Q: What is most we should pay for a share of preferred stock that pays an annual dividend of $1.8 per…

A: In case of perpetual stock we should pay for a share of preferred stock that pays an annual dividend…

Q: If P20,000 is invested in a fund that pays 10% compounded annually, how much money will be in the…

A: Answer -    Part 1 -  If P20,000 is invested in a fund that pays 10% compounded annually, how much…

Q: Your rich aunt has promised to give your $5200 in 4 years.  How much should you be willing to…

A: The concept of the time value of money states that the same amount of money has more value today…

Q: Critically evaluate the role of exchange rate systems in influencing FDI and trade levels.

A: Foreign direct investment:  One of the primary methods of contemporary capital internationalization,…

Q: 7.5 UNKNOWN PERIODIC PAYMENTS Often, in a given problem, the present or future value, the interest…

A: Future value of annuity includes the amount being deposited but also accumulated amount of the…

Q: Jesse borrowed from a bank at 5.92% compounded semi-annually; he settled the loan by repaying $3,055…

A: Interest rate is 5.92% compounded semi-annually Amount repaid is $3,055 every 6 month Time period is…

Q: A cheese factory wants to protect their purchase price of milk so they hedge in milk futures at a…

A: Basis in futures is the difference between the futures price and the spot price.It is an important…

Q: Suppose you have predicted the following returns for stock C in three possible states of nature.…

A: The expected rate of return is the weighted return that an investor receives based on the various…

Q: Define the term direct foreign investment?

A: The company is established to make a profit and it always keeps seeking investment opportunities…

Q: Alex has been offered an engineering job with a large company that has offices in Makati and Laguna.…

A: Future worth refers to the value of a current asset at some future date based on the interest…

Q: General Computers Inc. purchased a computer server for $70,000. It paid 35.00% of the value as a…

A: Purchase of Computer Server = $70,000 Down payment = $24,500 (being 35% of $70,000) A loan is taken…

Q: In the CRR notation, a share is worth $14, the up factor is 1.16 and the down factor is 0.95. What…

A: Risk neutral probability is very important concept while determining the value of call option and…

Q: Your bank is offering a term deposit that will earn investors an EAR of 12.00%. Your manager asks…

A: EAR (Effective Annual Rate) = (1 + (APR / n))n - 1 Where  n = Number of compounding in a year

Q: They want to invest around $50,000 and they are expecting good growth in the next 5 years. As they…

A: Cost of Condo varies due to variety of reason like  i) Location ii) Unit type, amenities and…

Q: 2.1 Calculate the weighted average cost of capital by making use of target capital structure. 2.2…

A: Information Provided: Equity weight = 60% Debt weight = 40% Tax rate = 28% Cost of equity = 13%…

Q: A firm has sales of $1220, net income of $226, net fixed assets of $544 and current assets of $300.…

A: Common size statement value of inventory can be calculated by dividing inventory value by total…

Q: Use the ‘Liquidity Premium Theory’ to explain the shape of the yield curve.

A: Liquidity Premium Theory states that investors will require a higher rate of return(interest rate or…

Q: Suppose the marginal benefit of writing a contract is $50, independent of its length. Find the…

A: Data given: MB(L)=Marginal Benefit =$50   At optimal, Marginal Benefit = Marginal Cost

Q: heavy equipment for a certain project and the details are as follows: ITEM: MACHINE A: MACHINE B:…

A: Annual Costs= Annual operating cost +Annual labor cost +0.10(Annual labor cost) + 0.04(First cost)

Q:

A: As given : The fund manager outperformed the CAPM by 4% per year for last 30 years. But the charges…

Q: Investors will pay a premium to invest in risky assets. OA. True OB. False

A: Risk premium is the extra return  that an investor receives for investing in risky assets.

Q: Required: a. What will total fees be for Fund (A)? For Fund (B)? b. Would one of the fee…

A: Subpart a) Total fees charge for the fund A will be fees on capital commited @0.45% plus fees on…

Q: • Maturity: 5 years • Face value: $10,000 • Coupon rate: 4% (makes coupon payments every 6 months…

A: Price of bond is present value of coupon payment and present value of par value of bond taken on…

Q: Zeta Printers is considering replacing the existing press with a more efficient press. The new press…

A: After tax salvage value of the fixed asset is calculated as shown below. After tax salvage…

Q: ohn has just borrowed an amount of K5,000 to pay his school fees. The loan is to be repaid in equal…

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Q: PROBLEM 6 10 K Reporting CARNIVAL CRUISE LINES          refer to:  Exhibit 13 Selected Financial…

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Q: Consider a start-up requiring $4.000 initial funding Furthermore, assume that a VC estimates the…

A: IRR is the rate at which the Net Present Value of a project is zero i.e. the desired return is…

Q: A $140,000 mortgage was amortized over 25 years by monthly repayments. The interest rate on the…

A: As per the given information: Mortgage amount - $140,000 Term of the loan - 25 years Interest rate -…

Instruments of Foreign Exchange Market

Foreign exchange is a worldwide market in which one nation’s currency is converted into another nation’s currency. In further terms, exchanging of nations currency with foreign currencies. Foreign exchange happens at a specified rate which is termed the foreign exchange rate. The exchange rates are not constant continuously changing as they are derived by market forces of supply and demand. Widely used foreign currencies are the United States- dollar, Euro, Japanese Yen, British pound, and Australian dollar. US- dollar is the most denominated foreign currency. The Euro to US dollar is a widely used currency pair in the forex market as these two currencies represent the world’s enormous economy. Forex trade is simple as exchanging currencies at the bank. The main players of forex markets are the central banks, financial institutions, intermediaries, investments banks, and other banks. Central Bank is the supreme player who decides the currency value of their own nation on the forex market. Mostly foreign exchange-traded at FX market (forex market) when tourists’ visits a foreign country, import, and export happens between two countries.