What is the loss or gain to swiss investor

Assignment Help Financial Management

Reference no: EM132038302

Suppose you purchase a 8-year AAA-rated Swiss bond for par that is paying an annual coupon of 6 percent and has a face value of 1,800 Swiss francs (SF). The spot rate is U.S. $0.66667 for SF1. At the end of the year, the bond is downgraded to AA and the yield increases to 8 percent. In addition, the SF depreciates to U.S. $0.74074 for SF1.

a. What is the loss or gain to a Swiss investor who holds this bond for a year? (Input the amount as a positive value. Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

Loss

Gain

to Swiss investor %

b. What is the loss or gain to a U.S. investor who holds this bond for a year? (Input the amount as a positive value. Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

Loss

Gain

to U.S. investor %

Reference no: EM132038302

Questions Cloud

Describe the client assets and resources : Describe the client's assets and resources (in order to understand the client's resilience). Describe how you, the social worker, will intervene to assist.

Calculate the total number of ways this can be done : Two students want to sit on opposite sides to each other and another two want to sit on the same side with windows.

What are the controversies that surround the issue : Do you believe in "repressed memory"? Why or why not? What are the controversies that surround this issue? Discuss and provide examples to support your answer.

How would market outcomes be altered : Problem: You are planning engineer at Mayor American Airport, you and your team are attempting to decide how airport slots should be allocated.

What is the loss or gain to swiss investor : What is the loss or gain to a Swiss investor who holds this bond for a year? What is the loss or gain to a U.S. investor who holds this bond for a year?

Explain the factors about police interrogative tactics : What specific factors about police interrogative tactics do you think will be important to the defense strategy? Discuss interrogation tactics that lead.

Which core economic question is being resolved by price : Which core (basic) economic question is being resolved by price increasing in hot weather in soda machines?

What is the npv of book with royalty payments : Assume that, once the book is finished, it is expected to generate royalties of $4.9 million in first year? What is the NPV of the book with the royalty payment

Determining the employer per-employee profit : If the employer offers a salary equal to the average productivity in the population, what will be the employer' s per-employee profit?

User Account

All Pages