You just won the irish lottery you bought a ticket while

Assignment Help Microeconomics

Reference no: EM13371729

You just won the Irish Lottery! You bought a ticket while you were on vacation in Ireland, and you just won a 1 million Euro jackpot after all taxes were taken out.

If, currently, US$1 equals .80 Euros, how much did you win in US dollars?

Suppose that the interest rate in Irish banks is 4% for a one year CD. In the USA, the rate is 2% for a one year CD. If you left your winnings in Ireland, how many Euros would you have in a year? If you had taken your winnings back to the USA, how many dollars would you have?

Suppose when you cashed in your CD in Ireland a year from now, the exchange rate had changed from US$1 for €.80 Euro, to US$1 to €.85 . How much would your Irish bank account be worth in US$ at that point? Did you do better off leaving your winnings in Ireland or bringing them home to the USA?

Explain how banks and individuals can use "covered interest arbitrage" to protect themselves when they make international financial investments.

Using the theory of purchasing power parity, explain how inflation impacts exchange rates. Based on the theory of purchasing power parity, what can we infer about the difference in inflation between Ireland and the USA during the year your lottery winnings were invested?

Reference no: EM13371729

Questions Cloud

1 collect data for a countrys gdp on a quarterly basis2 run : 1. collect data for a countrys gdp on a quarterly basis.2. run a regression using some statistics or econometrics

Suppose that ge is trying to prevent maytag from entering : suppose that ge is trying to prevent maytag from entering the market for high efficiency clothes dryers. even though

Suppose fred deposits 8000 in cash into his checking : suppose fred deposits 8000 in cash into his checking account at the bank of bonzo. the bank of bonzo has no excess

Conduct interview with one of the managers in our company : conduct interview with one of the managers in our company and ask him the questions. so do the interview with the

You just won the irish lottery you bought a ticket while : you just won the irish lottery you bought a ticket while you were on vacation in ireland and you just won a 1 million

The theory of market failure prescribes government : the theory of market failure prescribes government intervention in the form of a tax on producers when negative

In your own words describe the meaning of average cost you : in your own words describe the meaning of average cost. you normally buy a crate of wine for 75. one crate has 6

Write an essay evaluating the role of governments in : write an essay evaluating the role of governments in assuring that developing countries obtain a fair and adequate

A major new client has requested that your company present : a major new client has requested that your company present an investment seminar to illustrate the stock valuation

User Account

All Pages