What must be the one-year forward exchange rate

Assignment Help Financial Management
Reference no: EM131928425

If the interest rate in the United Kingdom is 8 percent, the interest rate in the United States is 12 percent, the spot exchange rate is $1.65/£1, and interest rate parity holds, what must be the one-year forward exchange rate?

(Do not round intermediate calculations. Round your answer to 4 decimal places. (e.g., 32.1616))

Reference no: EM131928425

Questions Cloud

Record the entry for changes in the exchange rate : Record the entry for changes in the exchange rate. Record the entry for changes in the exchange rate. Record the entry for receipt of payment.
What is the current value of a six-month american put : What is the current value of a six-month American Put option with strike price of D4 using a five-step binomial tree?
What is the current death benefit from policy : Yesterday Alexandra paid her premium of $1,100 for the coming year. What is the current death benefit from this policy?
What is the built-in gains tax liability : An S corporation in Lawrence, Kansas has a recognized built-in gain of $110,000 and taxable income of $98,000. What is the built-in gains tax liability
What must be the one-year forward exchange rate : If the interest rate in the United Kingdom is 8 percent, the interest rate in the United States is 12 percent.
Prepare the journal entries on the lessee books : Prepare the journal entries on the lessee's books to reflect the signing of the lease agreement and to record the payments
Hassle-free ?gures that it will need to purchase : Hassle-Free Web is bidding to provide webpage hosting servioes for Hotel Lisbon. Hotel Lisbon pays its ounent provider $10 100 per year for hosting
Finding the project average accounting return : You're trying to determine whether to expand your business by building a new manufacturing plant. The plant has an installation cost of $12380.
What amount should nevy corp report as current liabilities : Nevy Corp. has the following debt outstanding as of 12/31/2017. What amount should Nevy Corp. report as current liabilities on its 12/31/2017 balance sheet?

Reviews

Write a Review

Financial Management Questions & Answers

  Briefly explain what a credit default swap

Briefly explain what a credit default swap is and its role in the 2008 AIG bailout. Briefly explain the following Greeks: Delta, Theta, Gamma, Vega, Rho.

  Indifferent between these two projects

Garage, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 –$ 28,000 –$ 28,000 1 13,400 3,800 2 11,300 9,300 3 8,700 14,200 4 4,600 15,800 a-1 What is the IRR for each of these projects? At what dis..

  What discount rate will this project break even

When will the initial cash outflow be recovered? At what discount rate will this project break even?

  Explain how a swaption can be terminated at expiration

Explain how a swaption can be terminated at expiration by either exercising it or settling it in cash. Why are these procedures financially equivalent?

  Determine cash flows

Determine cash flows

  The key strategic initiatives that firms in tourism space

What would you identify as some of the key strategic initiatives that firms in the tourism space, such as Ardent Leisure, should be considering?

  What is your required return in order to invest

Apple Computers just paid a dividend of $6.94 and is expected to grow at 5%. You have estimated their beta at 0.95, with a risk free rate of 2.5% and equity risk premium of 6%. What is their current market value? You are valuing stock in Tofrandi Nat..

  Describe vernons product life-cycle theory of fdi

Describe Vernon's product life-cycle theory of FDI

  What is her cash flow under current capital structure

What is her cash flow under the current capital structure, assuming the firm has a dividend payout rate of 100 percent?

  Decided to raise the funds via seasoned stock offering

Four Wheels requires $1.75 million to fund a new project and has decided to raise the funds via a seasoned stock offering.

  What is the project net present value

A project is expected to create operating cash flows of $32,500 a year for three years. The initial cost of the fixed assets is $67,000. These assets will be worthless at the end of the project. An additional $4,000 of net working capital will be req..

  Economic growth will shift supply curve for loanable funds

Economic growth will shift the supply curve for loanable funds which causes interest rates to increase.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd