What is purchasing-power parity

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Reference no: EM131581426

1) The Green firm plans to borrow $25,000 for 120-day period. At maturity the firm will repay the $25,000 princial amount $3000 interest. The effective annual rate of interest for the loan can be estimated using the APR equation.

2) The Green firm bondholder require a $1250 payment of interest over the 60-day period for principal amount of $50,000, the effective cost of borrowing short-term credit is equated by annualizing the bondholders required rate of return of 2.5% over the 4 quarters in the year. The effective annual cost of fund provided by the loan is, therefore is...

3) The Green firm uses commercail paper to support its needs for short term financing. The firm plans to sell $5,000,000 in 180-day maturity paper, on which it expects to pay discounted interest of a rate of 20% annum($100,000). In addition , Green firm expects to inccur a cost of approximately $10,000in dealer placement fees & other expenses of issuing the paper. What is the effective cost of credit to Green firm.

4) The Green firm pay ¥250,000 yen to a Chinese firm April 27,2017. How many USD will be required for this transaction? USD $1.241

5) What is purchasing-power parity?

Reference no: EM131581426

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