Homework Answers
BRITISH POUND SHOULD BE = SPOT RATE*(1+ US RATE)/(1+ UK RATE)
BRITISH POUND SHOULD BE = 1.50*(1+ 0.05)/(1+ 0.07) = 1.4721963 = 1.4720
ANSWER : BRITISH POUND = $1.4720 (THUMBS UP PLEASE)
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Hello, Please provide details for the answers. Thank you! A put option on British pounds has...
Hello,
Please provide details for the answers.
Thank you!
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The spot rate between the U.K. and the U.S. is £.7614/$, while the one-year forward rate...
The spot rate between the U.K. and the U.S. is £.7614/$, while the one-year forward rate is 7540/$. The risk-free rate in the U.K. is 4.59 percent and risk-free rate in the United States is 274 percent. How much in profit can you earn on $11,000 utilizing covered interest arbitrage? Multiple Choice ο $9168 ο S25313 ο $10315 ο S276 86 ο S316 41
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to 39) According to the international Fisher Effect, if an investor purchases a five-year U.S. bond that has an annual interest rate of 5% rather than a comparable British bond that has an annual interest rate of 6%, then the investor must be expecting the at a rate of at least 1% per year over the next 5 years. A) British pound; appreciate B) British pound; revalue C) U.S. dollar; appreciate D) U.S. dollar, depreciate
Hello,
Please provide details for the answers.
Thank you!
A put option on British pounds has a strike (or exercise) price of $1.60/BP and the put premium per British pound is $0.03. If he spot FX rate at the expiration date is $1.55/BP, what would be the net profit of this put option holder. (calculate the net profit calculation & draw a net profit graph precisely) 3. 0.02 US one year interest rate is 6% annual and EU one year...
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The International Fisher Effect (IFE), Purchasing Power Parity (PPP) and Interest Rate Parity (IRP) are three very important theories in international finance, each with its own predictions and implication. Which of the following is correct? IRP suggests that a change in interest rate differential will not change the currency's forward premium/discount. According to purchasing power parity (PPP), if a foreign country's inflation rate is below the inflation rate at home, home country consumers will increase their imports from the foreign...
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