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You are an FX trader at a bank registered in Hong Kong. You have been tasked to formulate and execute a currency carry trade strategy involving the U.S. Dollar (USD) and the Armenian Dram (AMD). Suppose you observe that the spot price of USD in terms of AMD is 478.47 and the 1-year USD and AMD deposit rates are 2.6% and 9.5%, respectively.
Outline a carry trade strategy to exploit the interest rate differential between USD and AMD bank deposits if you believe AMD is unlikely to depreciate significantly in one year.
Under what condition would your strategy be profitable?
Suppose the Hong Kong Monetary Authority, Hong Kong's regulatory agency that monitors FX risk exposure of registered banks, learned about your position and instructed you to cover it given the recent armed conflict between Armenia and Azerbaijan (i.e., the 2020 Nagorno-Karabakh war). Explain what kind of contract you would need and how that contract would address your FX risk exposure.
What condition in the contract would allow you to break even (i.e., zero profit)?
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You are purchasing a business building valued at $225,000. You can find a mortgage at 5% if you can put 20% down. You believe your business can support a $1,000 a month mortgage payment (not including taxes and insurance). Should you select a 25 y..
Suppose one British pound can purchase 1.912 U.S. dollars today in the foreign exchange market, and currency forecasters predict that the pound sterling
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Explain what is continuous improvement and how to apply it to resource efficiency?
Coupon rate and the yield to maturity are expressed as an annualized percentage rate compounded annually. Coupons are paid annually.
Consider the data in the table below for three independent health services organizations:
The annual depreciation of the machinery is $150 000. Calculate the annual operating cash flow if the corporate tax rate is 30%.
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App Store Co. issued 15-year bonds one year ago at a coupon rate of 6.6 percent. The bonds make semiannual payments.
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