QUESTION 6 Assume one U.S. dollar is equal to 1.05 euros and one U.S. dollar is...
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...
80. Assume that the euro is expected to appreciate by 4% annually against the U.S. dollar. If a U.S. company can borrow dollars for 9.3%, and is trying to minimize its expected financing cost, what is the highest interest rate it should be willing to pay to borrow euros? a. 8.9% b. 7.2% c. 4.3% d. 5.096% e. None of the above 81. Assume that the euro is expected to depreciate 4% annually against the U.S. dollar. If a U.S....
6) Suppose your U.S. firm will receive EUR1,000,000 in one year. The interest rate on the euro is 5% pa and on the U.S. dollar is 3% pa. The current spot rate for the euro is $1.00. If you use a money market hedge, how much will you receive in one year? Note: 1,000,000/1.03 = 970,874; 1,000,000/1.05 =952,381; 970874 1.05 = 1.019,418; 952,381 * 1.03 = 980,952. A) S980,952 B) 5970,874 $1,019,418 D) None of the above.
Question 6: [1 point] Complete the below statement: On February 1, 2017, one U.S. Dollar was worth €0.93. On February 28, 2017, one U.S. Dollar was worth €0.95. During the month of February, the U.S. Dollar _________________ (appreciated, depreciated), and the Euro _________________ (appreciated, depreciated).
QUESTION 20 Blake Inc., a U.S. MNC, needs to pay EUR1,000,000 in one year. It can earn 2 percent annualized on a German security. The current spot rate for the euro is USD1.00 per euro. Blake can borrow funds in the U.S. at an annualized interest rate of O percent. If Blake uses a money market hedge to hedge the payable, what is the cost of implementing the hedge (rounded to the nearest dollar)? $980,392 None of the answers is...
5) The WSJ Dollar Index A) measures stock performance of 500 large companies listed on the stock exchange. B) is composed of 16 currencies that make up 80% of the Forex market. C) was created in 2001. D) All of the above. 6) Suppose your U.S. firm will receive EUR1,000,000 in one year. The interest rate on the euro is 5% pa and on the U.S. dollar is 3% pa. The current spot rate for the euro is $1.00. If...
Questions 3. Exchange Rate Effects on Investing. Explain how the appreciation of the Australian dollar against the U.S. dollar would affect the return to a U.S. firm that invested in an Australian money market security 4. Exchange Rate Effects on Borrowing. Explain how the appreciation of the Japanese yen against the U.S. dollar would affect the return to a U.S. firm that borrowed Japanese yen and used the proceeds for a U.S. project. 6. Bid/ask Spread. Utah Bank's s bid...
Calculate Percent Change Assume the the British Pound U.S. Dollar exchange rate changes from £1.6566/$ to £1.8522/$ What is the percentage change of the U.S. Dollar? O A. +10.56% OB. -11,81% O C. +11.81% D. -10.56% O E. None of answers is correct
6. Assume that the current dollar-Euro exchange rate (Ese) i equal to 1, the real exchange rate (qua/tur) = 1.26, the price level equals 2 in the U.S. and 2.5 in Europe. Assume that relative PPP holds. a. If inflation is 5% in the u.s. but 28 in Europe, what will be the price levels in the U.S. and Europe a year from now? b. What will be the nominal exchange rate (Ese) a year from now? c. What will...
Quiz 1113LI UCCIONS Question 4 2 pts Assume the exchange rate is 1.05 Swiss francs per U.S. dollar. How many U.S. dollars are needed to purchase 1,250 Swiss francs? $1,315.79 $1,190.48 $1,140.00 $1,318.46