What was the real cost of borrowing hkd for one year

Assignment Help Financial Management

Reference no: EM13926562

On January 1, the cost of borrowing Hong Kong dollars (HKD) for 1 year was 18 percent. During the year the U.S. inflation rate was 2 percent and the Chinese inflation rate was 9 percent. The exchange rate on January 1 was HKD7/$. On December 31, the exchange rate was HKD8/$. If you borrowed HKD100,000 on January 1, converted this to dollars and used these funds for one year, and then paid off the HKD loan on December 31, what was the real cost of borrowing HKD for one year?

Reference no: EM13926562

Questions Cloud

What is the expected dollar cost of the money market hedge : What is the expected dollar cost of the money market hedge? What is the expected dollar cost of remaining unhedged? What is the expected dollar cost of the forward hedge?

Problem regarding the philosophical puzzle : Consider the following philosophical puzzle: "If a tree falls in the forest and there's no one around to hear it, does it make a sound?" (1) How is this philosophical puzzle an epistemological problem? And (2) how would John Locke answer it? Quote..

Explain how the audit focus has changed. : However, that goal has been complicated by the changing focus of audits, most notably after the fall of Enron and WorldCom. Explain how the audit focus has changed.

Problem regarding the sampling design : Using the scenario and two variables your learning team developed for the Week 2 Business Research Project Part 1 assignment, create a paper of no more than 700 words in which the goal is to submit a random sampling plan in such detail that anothe..

What was the real cost of borrowing hkd for one year : If you borrowed HKD100,000 on January 1, converted this to dollars and used these funds for one year, and then paid off the HKD loan on December 31, what was the real cost of borrowing HKD for one year?

Problem regarding the international business : Arik Air is one Nigeria's largest airlines and one of the largest airlines in all of Africa. Its employment situation is a bit unique in that close to 10 percent of its employees are expatriates. Recruiting and retaining expatriates to work as pil..

What dangers are involved in meeting people online : Describe whom you might choose as your audience. Who are your readers, and what are their needs, motivations, and influences? In what ways will you need to structure your writing to appeal to them?

Impact of technology in toyota cuban business venture : The internet is not just for checking email or surfing the web to look for the latest golf gear. Companies are using the internet to help run their business more efficiently and to save on over-head costs. The internet is a less expensive option o..

Global value chain management : Research the Electronic Reserve Readings for ISCOM/383, course texts, the University Library, the Internet, or other resources on global value chain and global supply chain management.

User Account

All Pages