Solution-Npv of investing in great britain

Npv of investing in great britain

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1. The treasurer of a major U.S. firm has $32,027,148 to invest for three months. The annual interest rate in the United States is 0.36% per month. The interest rate in Great Britain is 0.68% per month. The spot exchange rate is £0.71, and the three-month forward rate is £0.73. Ignoring transaction costs, what would be the NPV of investing in Great Britain as opposed to invest in the U.S.?

2. Suppose the current exchange rate for the Polish zloty is Z3.38. The expected exchange rate in 5 years. The expected exchange rate in 5 years is Z3.65. What is the difference in the annual inflation rates for the United States and Poland over this period? Assume that the anticipated rate is constant for both countries.

Reference no: EM133056318

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Npv of investing in great britain

Reference no: EM133056318

Reference no: EM133056318

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