If China inflation suddenly becomes much higher than Philippines inflation, the Philippines demand for China goods will ____. In addition, the supply of China’s yuan to be sold for pesos will ____; both forces will place ____ pressure on the value of the yuan.    A. increase; decline; upward B. increase; decline; downward C. decrease; increase; upward D. decrease; increase; downward

Q: Relative inflation rates affect interest rates, exchange rates, the overall economic health of a…

A: Answer 1:The statement is a “valid” statement.Justification: The interest rate may comprise two…

Q: A large increase in the income level in Philippines along with no growth in the Indonesia income…

A: Increase; appreciate.

Q: If US national income declined while it remained stable in Japan, then US trade deficit with Japan…

A: A trade imbalance generally develops over the period of time when a country which generally spends…

Q: 1) Explain how each of the following scenarios, holding other things equal, will affect the value of…

A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…

Q: Investors from Japan, Philippines, and China frequently invest in each other based on prevailing…

A: Fewer; appreciate.

Q: If the Philippines places a strict quota on goods imported from China and China places a strict…

A: Foreign exchange market is a market in which trading of currencies takes place.

Q: An investment in China yields these expected after-tax renminbi cash flows (in billions). year  CF…

A: A method of capital budgeting that helps to evaluate the present worth of cash flow and a series of…

Q: If Canada's inflation is higher than the U.S., the Canadian exports to the U.S. should ____, its…

A: Inflation refers to the rise in price of goods and commodities in the country.

Q: Assume that the U.S. inflation rate is higher than the New Zealand inflation rate. This will cause…

A: Purchasing power parity - this theory says that if inflation rate in A country  is high than B…

Q: An increase in Philippines interest rates relative to Honkong interest rates would likely ____ the…

A: Reduce; increase

Q: The statement “the yen rose today against the dollar from 121 to 117” will only make sense if…

A: Exchange rate is the rate on which the currency of one country is exchanged with the currency of…

Q: Any event that increases the Philippines demand for Thailand baht should result in a(n) ____ in the…

A: Increase; peso

Q: An investment in China yields these expected after-tax renminbi cash flows (in bilions). CF -509 148…

A: Answer -  Formula for Calculation of forward rate is as under : (1+Home Inflation Rate)/ (1+ Foreign…

Q: True or false  The spot rate of foreign exchange between Thailand and the United States is ฿30.7/$.…

A: Currency depreciates when its value decreases.

Q: a country experiences an increase in interest rates relative to U.S. interest rates, the inflow of…

A: Demand and supply of currency depends on the increase and decrease in interest rate of country and…

Q: If the U.S. dollar appreciates, an MNC's _____. A. U.S. sales will probably decrease B. exports…

A: A multinational corporation has offices, facilities and other assets in at least one country other…

Q: 1. China and Japan are running with annual inflation rates of 3% and 5% respectively. The Currency…

A: The inflation rate of Chine is 3% The inflation rate of Japan is 5% The currency spot exchange rate…

Q: e cash rate in Australia is a benchmark interest rate which is set by the Board of the Reserve Bank…

A: The more interest rate would increase the attraction for foreign investors.

Q: 12. Compute exchange rates, FX appreciations, and USD profits below of this U.S.-based company that…

A: The exchange rate risk is one of the most common risks that a company faces. It denotes the…

Q: Relative inflation rates affect interest rates, exchange rates, the overall economic health of a…

A: Honor code: Since you have asked multiple questions, we will solve the first question for you. If…

Q: If the Philippines peso strengthens against China’s yuan, then Filipinos will    A. pay less to…

A: Currency exchange refers to the amount of currency it would be required to acquire another currency.…

Q: [XI) Suppose the Federal Reserve takes action to raise the level of interest rates in the U.S. If…

A: The economic health of the country is determined using the foreign exchange rate. The government in…

Q: As China's economy grows and the value of its currency, the Yuan, grows stronger, their goods and…

A: If any country's economy grows and its current value grows stronger means currency is getting…

Q: Which event would most likely result in an appreciation of the Philippine peso?    A. Philippines…

A: Currency appreciates because of variety of reasons. For example, when interest rate rises, the…

Q: Suppose that the Australian dollar is selling at a forward discount in the forward-exchange market.…

A: The foreign exchange market is defined as an over the counter or OTC global marketplace, which used…

Q: Assume that the yen is selling at a forward discount in the forward-exchange market. Then, most…

A: In exchange rate will be effected by interest rate prevailing in country of comparatives currencies.

Q: America has run a trade deficit with UK for several years. To eliminate the deficit, the USD must…

A: The trade deficit represents that the import of the company exceeds the export of the country. If…

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: If there is 10% inflation  in  Brazil,  15% inflation  in  Argentina,  and the Argentine  peso…

A: The exchange rate refers to the value of one currency is considered to convert it into the another…

Q: There is an ongoing debate between US and China regarding weather the Chinese Yuan's value should be…

A: The share of China in US export is 7%, while in import it is 20%. Moreover, the lower level of the…

Q: Identify the inflation rate India and USA. Then identify the percentage change of your home currency…

A: PURCHASING POWER PARITY THEORY: 1.As per this theory price level in two countries will affect…

Q: If the income level in Mexico increases exponentially with stagnant growth in the U.S. income level…

A: When the income level country increases , the purchasing power of the country rises, this leads to…

Q: Foreign exchange and commodity prices. While traveling in the following countries, you occasionally…

A: Implied exchange rates are as under-

Q: uppose Dassie Bank quoted the exchange rate of Singapore dollar in US$ at $0.60, the pound rate in…

A: Due to triangular arbitrage there are mispricing in market due to which buying and selling happens…

Q: uestion (Short answers) S Suppose that prices in Brazil are rising faster than US prices, and the…

A: Purchasing power parity says that purchase power is related to exchange rate among countries.

Exchange Rate Risk

It is the possibility that the value of a currency will fluctuate in the future. In the wake of globalization, business establishments have increasingly ventured into international markets. The volume of international trade has prospered excellently in the near past and is expected to be more affluent in the future. The use of exchange-traded derivative financial instruments has been multi-folded to provide for the requirements of various MNCs and offshore potential investors. Most banks and financial institutions have helped integrate the global economies. Our Government has introduced some bold and extreme measures to fulfil the purpose behind the fiscal, industrial, and monetary policies. The enactment of GST is a huge step towards streamlining the taxation system of the country. Owing to Covid-19, this aspect of corporate risk management has become critical.