What must be the one-year rate on the euro

Assignment Help Financial Management

Reference no: EM131061032

The spot US dollar-euro exchange rate is $1.10/euro. The one-year forward exchange rate is $1.0782/euro. If the one-year dollar interest rate is 3%, then what must be the one-year rate on the euro? Both rates are continuously compounded.

Reference no: EM131061032

Questions Cloud

Preferred stock valuation : Fee Founders has perpetual preferred stock outstanding that sells for $34.00 a share and pays a dividend of $5.00 at the end of each year. What is the required rate of return?

Expectations theory : Interest rates on 4-year Treasury securities are currently 6.7%, while 6-year Treasury securities yield 7.4%. If the pure expectations theory is correct, what does the market believe that 2-year securities will be yielding 4 years from now?

What is the stock capital gain yield : A company has just paid a dividend of 3.63$. Its discount rate is 11.6%, and the expected perpetual growth rate is 3.1%. What is the stock's Capital Gain Yield?

What is the velocity of the electron : A pair of charged conducting plates produces a uniform field of Eo= 10,859 N/C directed to the right, between the plates. The separation of the plates is L= 37mm. An electron (e=1.6 x 10^-19 C; m9.1 x 10^-31 kg) is projected from plate A, directly to..

What must be the one-year rate on the euro : The spot US dollar-euro exchange rate is $1.10/euro. The one-year forward exchange rate is $1.0782/euro. If the one-year dollar interest rate is 3%, then what must be the one-year rate on the euro? Both rates are continuously compounded.

How high above the ground is he at his highest point : The maximum speed of a child on a swing is 5.3 m/s. The child's height above the ground is 1.2m at the lowest point in his motion. How high above the ground is he at his highest point?

What is the stocks capital gain yield : A company has just paid a dividend of 4.8$. Its discount rate is 10.6%, and the expected perpetual growth rate is 5.6%. What is the stock's Capital Gain Yield?

Stock performance in attracting investment capital : What is the importance of stock performance in attracting investment capital for companies? What guidelines should an investor use to make stock investment decisions? What should your investment objective include when selecting stocks? How do you pre..

Discuss factors that may affect current-future performance : In this Project You will discuss factors that may affect current and future performance of Apple company. Based on what you know about the organization’s financial health and performance, you will then forecast future performance of Apple company for..

User Account

All Pages