Homework Answers
Answer 23
The amount that your firm will pay = Amount expected to pay / value of yen in dollars
= 4,000,000/ 80 = $50,000
Therefore option D $50,000 is the right answer
Answer 24
The firm could purchase ¥4 million in call choices on yens, state, for
precedent, at a rate of 105¥ per dollar. A call alternative gives the purchaser a directly to
purchase dollars at the cost settled upon. On the off chance that the dollar devalues to such an extent that its cost
transcends 105¥, state to 110¥, the firm will practice the alternative
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Questions 23 and 24 You are a financial adviser to a U.S. corporation that expects to...
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3. You are a financial adviser to a U.S. corporation that expects to receive a payment of 60 million Japanese yen in 180 days for goods exported to Japan. The current spot rate is 100 yen per U.S. dollar or 0.01000 dollar per yen. You are concerned that the U.S. dollar is going to appreciate against the yen over the next six months A. Assuming the exchange rate remains unchanged, how much does your firm expect to receive in U.S....
Macomb Corporation is a U.S. firm that invoices some of its exports in Japanese yen. If...
Macomb Corporation is a U.S. firm that invoices some of its exports in Japanese yen. If it expects the yen to weaken, it could ____ to hedge the exchange rate risk on those exports. a. sell yen put options b. buy yen put options c. buy yen call options d. sell yen call options with explanation please
Name Chapter 3 1) You observe a quotation of the Japanese yen (K) of $0.007. You...
Name Chapter 3 1) You observe a quotation of the Japanese yen (K) of $0.007. You are, however, interested in the number of yen per dollar. Thus, you calculate thequotation of /s a. direct; 142.86 b. indirect; 142.86 c. indirect; 150 d. direct; 150 e. indirect, 0 2) Which of the following is probably NOT appropriate for an MNC wishing to reduce its exposure to British pound payables? a. Purchase pounds forward b. Buy a pound futures contract c. Buy...
a)Should a U.S. firm take a long or short position in British Pound futures if it...
a)Should a U.S. firm take a long or short position in British Pound futures if it wants to hedge against payables in British Pound? Explain you answer. b)Should a U.S. firm buy a call option or buy a put option on Japanese Yen if it wants to hedge against receivables in Japanese Yen? Explain your answer. c)What are the main differences between forward/futures vs. options as a hedging tool? d) Assume that the transactions listed in the first column of...
Suppose that you go on vacation to Canada every summer. Last year, the hotel room where you stayed cost C$100 per night, and it costs the same this year. The exchange rate was 1.04 USS/C$ last year,...
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U.S. dollarlJapanese Yen. What would be the premium expense, in home currency, for a Japanese firm...
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Question 23 4 pts GED Corporation, located in the United States, has an accounts payable obligation...
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Please answer in an 'A,B,C,D' format where A would be the first answer and D would...
Please answer in an 'A,B,C,D' format where A would be the first
answer and D would be the last. Thank you.
QUESTION 22 Suppose that $1 U.S. costs $1.50 Canadian. If in St. Louis a CD costs $10 U.S. and in Montreal it costs $15 Canadian, then _____ Canadians will buy CDs in St. Louis Virgin Records will have an incentive to build more stores in North America Americans will buy CDs in Montreal o purchasing power parity exists QUESTION...
Question 82 To appreciate the U.S. dollar against the Mexican peso, in the foreign exchange market...
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B) FALSE dents) are 22) Currency inflows (payments by residents of any other country to U.S. resi recorded as credits in the U.S. BOP A) TRUE B) FALSE. 23) If China acquires $100 billion of U.S. government bonds, this is a credit in the U.S. current account. A) TRUE B) FALSE 24) Today, a U.S. importer places an order for machine tools that will arrive in Houston in 60 days, when he must pay 4,000,000 to the German exporter. Assume...
3. You are a financial adviser to a U.S. corporation that expects to receive a payment of 60 million Japanese yen in 180 days for goods exported to Japan. The current spot rate is 100 yen per U.S. dollar or 0.01000 dollar per yen. You are concerned that the U.S. dollar is going to appreciate against the yen over the next six months A. Assuming the exchange rate remains unchanged, how much does your firm expect to receive in U.S....
Name Chapter 3 1) You observe a quotation of the Japanese yen (K) of $0.007. You are, however, interested in the number of yen per dollar. Thus, you calculate thequotation of /s a. direct; 142.86 b. indirect; 142.86 c. indirect; 150 d. direct; 150 e. indirect, 0 2) Which of the following is probably NOT appropriate for an MNC wishing to reduce its exposure to British pound payables? a. Purchase pounds forward b. Buy a pound futures contract c. Buy...
Suppose that you go on vacation to Canada every summer. Last year, the hotel room where you stayed cost C$100 per night, and it costs the same this year. The exchange rate was 1.04 USS/C$ last year, and it is 0.95 US$/C$ this year. This means you will pay than you paid last year. per night this year The U.S. dollar-Canadian dollar exchange rate is essentially the price of a Canadian dollar in terms of U.S. dollars. When this price...
U.S. dollarlJapanese Yen. What would be the premium expense, in home currency, for a Japanese firm to purchase an option to sell 700,000 U S dollars, assuming the initial values listed in this table: EEB The premium expense, in home currency, is Y (Round to two decimal places.) Pricing Currency Options on the Japanese Yen A Japanese firm wishing to buy A U.S.-based firm wishing to buy or sell dollars (the foreign currency) or sell yen (the foreign currency) Variable...
Question 23 4 pts GED Corporation, located in the United States, has an accounts payable obligation of ¥800 million payable in one year to a bank in Tokyo. The current spot rate is ¥115/$1.00 and the one year forward rate is ¥110/$1.00. The annual interest rate is 3 percent in Japan and 6 percent in the United States. GED can also buy a one-year call option on yen at the strike price of $0.0080 per yen for a premium of...
Please answer in an 'A,B,C,D' format where A would be the first
answer and D would be the last. Thank you.
QUESTION 22 Suppose that $1 U.S. costs $1.50 Canadian. If in St. Louis a CD costs $10 U.S. and in Montreal it costs $15 Canadian, then _____ Canadians will buy CDs in St. Louis Virgin Records will have an incentive to build more stores in North America Americans will buy CDs in Montreal o purchasing power parity exists QUESTION...
Question 82 To appreciate the U.S. dollar against the Mexican peso, in the foreign exchange market the Fed could dollars and pesos Not yet answered Points out of 1.00 Remove flag Select one: A. selt, sell O B. selt;buy C. buy, sell D. buy, buy E. None of the above answers is correct because the Fed cannot affect the US exchange rate. If the exchange rate changes from 15 euros per dollar to 10 euro per dollar, the euro has...
B) FALSE dents) are 22) Currency inflows (payments by residents of any other country to U.S. resi recorded as credits in the U.S. BOP A) TRUE B) FALSE. 23) If China acquires $100 billion of U.S. government bonds, this is a credit in the U.S. current account. A) TRUE B) FALSE 24) Today, a U.S. importer places an order for machine tools that will arrive in Houston in 60 days, when he must pay 4,000,000 to the German exporter. Assume...
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