The interest rate in Japan is 1%. The yen to dollar spot exchange rate is ¥100 per dollar and the forward premium for the yen is 5% for the one year ahead forward contract. What is the US interest rate as per the Covered Interest Rate Parity?   Approximately 4% Approximately 6%

Q: A project that will provde annual cash flows of $2,450 for nine years costs $10,100 today. a. At a r...

A: a) Initial Investment=$10100 Annual Cash Flow=$2450 Required Rate of return= 9%  NPV of the Project=...

Q: Big Rock has several investment portfolios with a local mutual fund company. One of the company's di...

A: Risk and return are the two different factors of an investment. Different investors have different l...

Q: 17. Which of the following statements is true about bonds in the US? A) State and local governments ...

A: Bond is referred as the fixed income instruments, which used to represent the loan that are made thr...

Q: P8-3 Portfolio Return At the beginning of the month, you owned $12,000 of Ford Motor, $18,000 of Net...

A: The effective return is the actual return that the company gets when it takes part in investments.  

Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery w...

A: Formula's Calculations: Therefore; Cost of Debt is 5.53%

Q: John's cafe is considering the purchase of a waffle maker that cost $10,000. The waffle maker has an...

A: Net present value (NPV) is the value of all the cash flow of the investment (positive and negative) ...

Q: A   ​$8037.58   investment matures in   6   ​years,   5   months. Find the maturity valu...

A: Investment amount (X) = $8037.58 n = 6 years 5 months = 6 (5/12) = 6.4167 years Interest rate = 2.7%...

Q: To be able to take her dream vacation, Maya decides to save for 4 years. She opens a savings account...

A: We need to use simple interest formula to calculate simple interest Simple interest =Principal*Rate*...

Q: present value is the

A: https://docs.google.com/document/d/19Usy902_lK6tWQ3RgtQiUedGybbYnqlidq6sySnT8YI/edit

Q: /hich of the following statements most accurately characterizes the pecking order theory of capital ...

A: The pecking order theory of capital structure is an important theory of capital structure. The theor...

Q: You are considering an investment in Justus Corporation's stock, which is expected to pay a dividend...

A: The stock price which is the maximum price to be paid for share consists of dividends and terminal v...

Q: A market research firm with current sales of $750 does not expect any growth in sales for the next t...

A: Current Sales are $750 Growth rate in sales is 0% for next 2 years Tax rate is 34% Straight line dep...

Q: capital investment:

A: Capital investment refers to acquiring physical assets for the further use of achieving long-term bu...

Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery w...

A: Working Note #1 Calculation of depreciation: Year 1 2 3 4 5 Opening Balance ($) 80000000 600000...

Q: Lupé made a down payment of $5000 toward the purchase of a new car. To pay the balance of the purcha...

A: Present Value can be calculated using PV function in excel   PV (rate, nper, pmt, [Fv], [type]) Rat...

Q: PROBLEM 3: A P2 000 loan was originally made at 8% simple interest for 4 years . At the end of this ...

A: Loan (L) = P 2000 Simple interest rate for 4 years (r) = 8% Interest rate for 3 more years (6 semian...

Q: 1. In buying a car, Amiel pays P 210,000.00 cash and agrees to pay P790,000.00 for 4 years at 12% in...

A: Present Value:  The present value is the value of cash flow stream or the fixed lump sum amount at t...

Q: Cross-Ocean Boats Ltd. is in the 30% tax bracket. It is interested in determining the minimum return...

A: Here, Details of Bonds: Details of Equity Shares: Details of Preference Shares:  

Q: Explain these three 1. PURCHASING POWER RISK - is perhaps, more difficult to recognize than the oth...

A: The term "risk" refers to the unpredictability of future events. The possibility of experiencing an ...

Q: A project has the following cash flows. What is the internal rate of return? Years Cash flow -$46.80...

A: Solution:- Internal Rate of Return (IRR) is the rate of return which the bank is yielding. At IRR, N...

Q: On January 1, Year 1, you are considering the purchase of Niko Enterprises' common stock. Based on y...

A: The purchase price can be found using the Gordon Model. As per Gordon Model, the price of stock toda...

Q: 4. Jones would like to borrow S$4000 for a project. He plans to pay back the loan plus the interest ...

A: In order to find the best alternative, we must calculate the value of the effective annual rate in b...

Q: A salesman earns P2,500 on the 1st month, P2,800 on the 2nd month, P3,100 on the 3rd month and so on...

A: Since you have posted a multiple question then we will be solving the first question only as per the...

Q: What is the Macaulay duration of a bond with a coupon of 5.8 percent, eleven years to maturity, and ...

A: Since, the number of compounding is not given, we will assume that the coupon is paid annually. Form...

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A: Portfolios can consist of a variety of investments such as equities, bonds, commodities, cash and ca...

Q: Price Forward Dividend 1T Target Est $86.36 $2.08 $105.28 Given the information in the table, if the...

A: Given Forward dividend = $2.08 1T Target Est = $105.28 Required return = 11.5%  

Q: A project starts with an initial capital outflow of RM450,000 in exchange for the following likely c...

A:

Q: f you were asked to describe the terms of the Federal Reserve's Board of Governors, how would you ex...

A: Board of Governors The Board of Governors are also known as the Federal Reserve Board. They are the ...

Q: Adjustable Rate Payment Loan: $250,000.00 Term: 30 Years Pymt 1: Pymt 2: Pymt 3: 1st Year Rate: 3.00...

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Q: 1. Discuss: Firms often involve themselves in projects that do not result directly in profits. For e...

A: Direct profit is defined as the amount of money earned from sales after deducting direct costs. This...

Q: An investment has an initial cost of $3.2 million. This investment will be depreciated by $900,000 a...

A: The average accounting return or average rate of return is an accounting metric which helps in calcu...

Q: Krell Industries has a share price of $22.79 today. If Krell is expected to pay a dividend of 1.19% ...

A: Current stock price = $22.79 Dividend rate = 1.19% Growth rate = 23.33%

Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery w...

A: "Hi, Thanks for the Question. Since you asked multiple sub parts question, we will answer first thre...

Q: A college plans to build a new dormitory building. A group of alumni volunteered to donate enough fu...

A: Interest rate is 12% Compounded annually Maintenance cost for first 20 years is $35,000 Maintaince c...

Q: A loan in the amount of $10,000 is being paid back with monthly payments of $1800. Determine the fol...

A: Here, Loan Amount is $10,000 Monthly Payments is $1,800

Q: Consider a bond with a coupon of 5.8 percent, eleven years to maturity, and a current price of $1,06...

A: Yield to maturity (YTM) is the total return expected on the bond if the bold is held till maturity. ...

Q: 9. Implied interest rate and period Consider the case of the following annuities, and the need to co...

A: Present Value is calculated by dividing the future value by the 1+r factor for the given required ra...

Q: Determine the amount of P 45000 after 9 years if the rate is 5% compounded quarterly. O 77329 O 7037...

A: Present value (PV) = P45000 Interest rate = 5% Quarterly interest rate (r) = 5%/4 = 1.25% Period = 9...

Q: Please answer the following question according to the figure below. 1. How does increase in debt aff...

A: Debt and equity financing Each source of financing has its own advantages and disadvantages. For exa...

Q: Find the effective annual interest rate r of the given nominal annual interest rate. Round your answ...

A: Effective interest rate is interest rate considering the impact of compounding on interest rate.

Q: Analyse the Assets-to-equity ratio of 1.87 in 2019 and 1.67 in 2020

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Q: "You are an institutional investor interested in selling a certain security that is traded in an OTC...

A: Solution:- Bid price means the price at which the dealer is ready to buy the security and offer pric...

Q: How transactions between suppliers and users of funds take place. How would you prove that there was...

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Q: A retail kiosk has listed a pair of sunglasses for $136 less 30%. A department store in the shopping...

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Q: On January 1, 2020, Kabond issued a 3-year bond with conversion feature, 9% P1,000,000 at par. Witho...

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Q: Find the amount (future value) of the ordinary annuity. (Round your answer to the nearest cent.) $1...

A: Future value can be calculated using FV (rate, nper, pmt, [Pv], [type]) Rate The interest rate Nper...

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.