Reference no: EM13953810
1. Assume that interest rate parity holds. The U.S. one-year interest rate is 10% and the Australian one-year interest rate is 8%. What will the approximate effective yield be for an Australian citizen of a one-year deposit denominated in U.S. dollars? Assume the deposit is covered by a forward sale of dollars.
a. 10%.
b. 8%.
c. 2%.
d. cannot answer without more information
2. Assume that a U.S. investor invests in a British CD offering a six-month interest rate of 5%. Over this six-month period, the pound depreciates by 9%. The effective yield on the British CD for the U.S. investor is:
a. 14.45%.
b. −4.45%.
c. 14.00%.
d. −4.00%.
3. Assume that there are several foreign currencies that exhibit a higher interest rate than the U.S. interest rate. The U.S. firm has a higher probability of generating a higher effective yield on a portfolio of currencies (relative to the domestic yield) if:
a. the foreign currency movements against the U.S. dollar are highly correlated.
b. the foreign currency movements against the U.S. dollar are perfectly positively correlated.
c. the foreign currency movements against the U.S. dollar exhibit low correlations.
d. none of the answers above would have any impact on the probability of a foreign cash investment generating a higher effective yield than a U.S. investment.
4. Which of the following is not a payment method used for international trade?
a. Supplier credit
b. Bill of exchange
c. Bill of lading
d. Letter of credit
e. All of the above are payment methods used.
|
What damages may she recover from johnny
: Frida agrees to sell a car to Johnny for $900. However, Johnny reneges on the written contract. Frida is able to find another buyer for the car at $700. What damages may she recover from Johnny?
|
|
How much will you receive each year from the perpetuity
: You are going to pay $800 into an account at the beginning of each of 20 years. The account will then be left to compound for an additional 20 years. At the end of the 41st year you will begin receiving a perpetuity from the account. If the account p..
|
|
Breach of the contract allows him to avoid the contract
: Tony contracts with Paulie for Paulie to build him a house. They contract for a particular brand of pipes to be used. However, Paulie decides to use a slightly cheaper brand that is of a slightly lesser quality. Tony claims that this breach of the co..
|
|
What is the rate of return on his investment
: John opens a brokerage account and purchases 300 shares Starbucks at $40 per share. He borrows $4000 from his broker to help pay for the purchase. The interest rate on the loan is 8%. What is the margin in John's account when he first purchases stock..
|
|
Payment method used for international trade
: Assume that interest rate parity holds. The U.S. one-year interest rate is 10% and the Australian one-year interest rate is 8%. What will the approximate effective yield be for an Australian citizen of a one-year deposit denominated in U.S. dollars? ..
|
|
Create excitement about the launch of a new product
: One common use of product placement is to help create excitement about the launch of a new product. Implicit celebrity endorsements and authenticity are key issues to consider when judging placement opportunities.
|
|
Operating economies are never a motive for mergers
: The smaller the synergistic benefits of a particular merger, the greater the scope for striking a bargain in negotiations, and the higher the probability that the merger will be completed. Since mergers are frequently financed by debt rather than equ..
|
|
How key stakeholders may affect the implementation stage
: Consider the brief description of Target’s stakeholder relationships and combine that information with your experience shopping in a Target store. How might Target’s stakeholders (in particular, employees, customers, local communities, and suppliers)..
|
|
What is your anticipated price per share or NAV
: The mutual fund paid $10million to Goldman Sachs during the month and reduced its other obligations by $27million. The mutual fund is now at $695 and has 50 million shares outstanding, what is your anticipated price per share or NAV?
|