Pearson eText for Engineering Economy -- Instant Access (Pearson+)
17th Edition
ISBN: 9780137533138
Author: William Sullivan, Elin Wicks
Publisher: PEARSON+
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Chapter 8, Problem 36P
To determine
Impact of exchange rate fluctuations.
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At the start of May, you purchased some shares in Apple (a US company) for $US 43.87, and hedged your position using forward contracts (hedging the purchase value of the shares). The exchange rate at the time of purchase was $US1 = $NZ 2.73, while the one month NZ interest rate was 7.90% and the one month US interest rate was 7.30% (both rates are per annum, with monthly compounding). At the end of May, the exchange rate was $US1 = $NZ 2.78, while the shares were worth $US 41.63. Apple paid no dividends during May. What was your ($NZ) holding period return over the month of May?
Suppose 6-month Treasury bills are trading at a YTM of 1.6%, 12-month T-bills are trading at a YTM of 2.9%. If 18-month Treasury notes with a coupon rate of 3% are trading at par ($100), then what is the 18-month spot rate?
Assume that all full-bodied coins are issued by the federal government and that the following three steps are
involved:
(1) It defines the gold value of the monetary unit by stipulating that the dollar contains 24.0 grains of pure
gold. Also, assume that there are 480 grains of gold in one ounce of gold.
(2) At the stipulated price, it will purchase all the metal that is offered and coin it without limit and virtually
without charge.
(3) It will permit the melting of coins to get gold for nonmonetary uses.
Below are the Demand and Supply schedules for gold as a commodity for non-monetary purposes:
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Quantity Demanded (ozs.) Price
$25.00
Quantity Supplied (ozs.)
500
400
100
200
20.00
300
300
400
500
15.00
200
100
10.00
5.00
You may use this blank graph to help you answer all questions below:
Price
Quantity
Chapter 8 Solutions
Pearson eText for Engineering Economy -- Instant Access (Pearson+)
Ch. 8 - The seasonal energy efficiency ratio (SEER) is 13...Ch. 8 - Prob. 2PCh. 8 - Prob. 3PCh. 8 - Prob. 4PCh. 8 - Prob. 5PCh. 8 - Prob. 6PCh. 8 - Prob. 7PCh. 8 - Prob. 8PCh. 8 - Prob. 9PCh. 8 - Prob. 10P
Ch. 8 - Prob. 11PCh. 8 - Prob. 12PCh. 8 - Prob. 13PCh. 8 - A commercial building design cost 89/square-foot...Ch. 8 - Prob. 15PCh. 8 - Prob. 16PCh. 8 - Prob. 17PCh. 8 - Prob. 18PCh. 8 - Prob. 19PCh. 8 - Prob. 20PCh. 8 - Prob. 21PCh. 8 - Prob. 22PCh. 8 - Prob. 23PCh. 8 - Prob. 24PCh. 8 - Prob. 25PCh. 8 - Prob. 26PCh. 8 - Prob. 27PCh. 8 - Prob. 28PCh. 8 - Prob. 29PCh. 8 - Prob. 30PCh. 8 - Prob. 31PCh. 8 - Prob. 32PCh. 8 - Prob. 33PCh. 8 - Prob. 34PCh. 8 - Prob. 35PCh. 8 - Prob. 36PCh. 8 - Prob. 37PCh. 8 - Prob. 38PCh. 8 - Prob. 39PCh. 8 - Prob. 40PCh. 8 - Prob. 41PCh. 8 - Prob. 42PCh. 8 - Prob. 43PCh. 8 - Your company manufactures circuit boards and other...Ch. 8 - Prob. 45PCh. 8 - Prob. 46PCh. 8 - Prob. 47PCh. 8 - Prob. 48PCh. 8 - Prob. 49SECh. 8 - Prob. 50SECh. 8 - Prob. 51SECh. 8 - Prob. 52CSCh. 8 - Suppose the cost of electricity is expected to...Ch. 8 - Prob. 54CSCh. 8 - Prob. 55FECh. 8 - Prob. 56FECh. 8 - Prob. 57FECh. 8 - Prob. 58FECh. 8 - Prob. 59FECh. 8 - Prob. 60FECh. 8 - Prob. 61FE
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