Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
North Bank has been borrowing in the U.S. markets and lending abroad, thereby incurring foreign exchange risk. In a recent transaction, it issued a one-year $2.80 million CD at 5 percent and is planning to fund a loan in British pounds at 8 percent for a 3 percent expected spread. The spot rate of U.S. dollars for British pounds is $1.4580/£1.
A. However, new information now indicates that the British pound will appreciate such that the spot rate of U.S. dollars for British pounds is $1.4300/£1 by year-end. Calculate the loan rate to maintain the 3 percent spread? (Do not round intermediate calculations. Round your answer to 2 decimal places.(e.g., 32.16)) Loan rate=10.11%
B. The bank has an opportunity to hedge using one-year forward contracts at 1.4600 U.S. dollars for British pounds. Calculate the net interest margin if the bank hedges its forward foreign exchange exposure? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))
Net interest margin=?
C. Calculate the loan rate to maintain the 3 percent spread if the bank intends to hedge its exposure using the forward rates? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))
Loan rate=?
A bond with a coupon rate of 8% makes semiannual coupon payments on January 15 and July 15 of each year. The ask price for the bond on January 30 is at 100:08. What is the Invoice Price of the bond? The coupon period has 182 days.
According to the information above, in one to two paragraphs what can you conclude about Six Flags and its industry? Is it a good idea to invest in the company? What is the industry's EPS? Try to be as specific as possible. How would you evaluate Six..
What is the amount of the after-tax salvage value of the equipment? What is the value of the depreciation tax shield in year 2 of the project?
What is the initial investment outlay for the spectrometer, that is, what is the Year 0 project cash flow?
British quince comes across as an average-risk investment project that offers rate of return of 9.5%. This is director’s notes that the company can easily borrow the required investment at 7%. It's simple, he says. If the bank lends us. Money at 7%, ..
You own a bond with the following features: face value of $1000, coupon rate of 6% (semiannual compounding), and 15 years to maturity. The bond has a current price of $1,200. The bond is callable after nine years with the call price of $1100. What is..
Square is a device that transforms a smart phone into a credit debit card machine. How is a Square using wireless network to gain a competitive advantage? What can Square do to maintain its completive advantage and become more profitable?
An investor has an opportunity to buy a parcel of land for $350,000. He plans to sell it in two years. What will the sale price have to be for the investor to get a 23% constant dollar before-tax ROR with inflation averaging 12% annually?
Assume the CAPM holds. The risk-free rate is 4% and the market portfolio expected return is 10% and standard deviation of 10%. An asset has an expected return of 6% and a beta of 0.8. Is this asset return consistent with the CAPM? What expected retur..
Calculate and compare the ratio of the Smiths’ to the Joneses’ taxable income and the ratio of the Smiths’ to the Joneses’ taxes. What does this demonstrate about the federal income tax structure?
What is the present value of the new drug if the interest rate is 12% per year?
Landmark Coal operates a mine. During July, the company obtained 500 tons of ore, which yielded 250 pounds of gold and 63,400 pounds of copper. The joint cost related to the operation was $500,000. Gold sells for $325 per ounce and copper sells for $..
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd