Forward rate is used to forecast exchange rates

Assignment Help Financial Management

Reference no: EM131089364

4 year annualized interest rate in the US = 9%

4 year annualized interest rate in Singapore =6%

Assume Interest Rate Parity holds

Singaporain dollar spot rate = $0.60

If the forward rate is used to forecast exchange rates, what will be the forecast for the Singapore dollar's spot rate in 4 years?

What percentage appreciation or depreciation does this forecast imply over the 4 year period?

Reference no: EM131089364

Questions Cloud

Total amount of dollars received : A firm wants to use an option to hedge 12.5 million in receivables from New Zealand firms. The premium is $.03. The exercise price is $.55. If the option is exercised, what is the total amount of dollars received (after accounting for the premium ..

Calculate cash receipts from sales and cas : During 2014, Nebraska Wheat Company, a maker of whole-grain products, had sales of $426,500. The ending balance of accounts receivable was $127,400 in 2013 and $96,200 in 2014.

Location dependent and volatile : Compared to manufacturing, service requirements tend to be more time dependent, location dependent and volatile. In addition, service quality is often directly observable by customers.

Managing the four phases of the service life cycle : Suppose company intends to offer a new service to some of its internal customers. Briefly Discuss how the fact that the customers are internal would change, the process of managing the four phases of the service life cycle.

Forward rate is used to forecast exchange rates : If the forward rate is used to forecast exchange rates, what will be the forecast for the Singapore dollar's spot rate in 4 years? What percentage appreciation or depreciation does this forecast imply over the 4 year period?

The three activity-basedrates to determine the activity-base : Complete the following table, using the single machine hour rate to determine the"per-unit factory overhead for each refrigerator (Column A) and the threeactivity-basedrates to determine the activity-based factory overhead per unit (Column B).

Several of its orange juice products : An orange juice producer has found that the fill weights (weight of product per container) of several of its orange juice products do not meet specifications. If the problem continues, unhappy customers will stop buying their product.

What is the statement of cash flows : What is the statement of cash flows, and how does it differ from the income statement? What are the three major section of the statement of cash flows? What is the most important line on the statement of cash flows?

Implications for operations management : Discuss product life cycle management and its implications for Operations Management

User Account

All Pages