Currently, the spot exchange rate is $0.85/A$ and the one-year forward exchange
rate is $0.81/...
Currently, the spot exchange rate is $0.85/A$ and the one-year forward exchange
rate is $0.81/A$. One-year interest is 3.5% in the United States and 4.2% in
Australia. You may borrow up to $1,000,000 or A$1,176,471, which is equivalent
to $1,000,000 at the current spot rate.
a. Determine if IRP is holding between Australia and the United States.
b. If IRP is not holding, explain in detail how you would realize certain profit in
U. S. dollar terms.
c. Explain how IRP will be restored as a result of the arbitrage transactions you
d. carry out above.
Answers: 2
Other questions on the subject: Business
Business, 21.06.2019 17:00, mdaniella522
Which basic economic questions deals with the issue of how the incomeof people in various occupations is determined
Answers: 1
Business, 23.06.2019 00:30, Nerdylearner8639
Kim davis is in the 40 percent personal tax bracket. she is considering investing in hca(taxable) bonds that carry a 12 percent interest rate. what is her after- tax yield(interest rate) on the bonds?
Answers: 1
Business, 23.06.2019 01:00, ayowazzzgood
Motonous corporation has completed its fiscal year and reported the following information. the company had current assets of $153,413, net fixed assets of $ 412,331, and other assets of $7,822. the firm also has current liabilities worth $65,314, long-term debt of $178,334, and common stock of $162,000. how much retained earnings does the firm have?
Answers: 2
Business, 23.06.2019 01:50, maddie7417
You are looking at a one-year loan of $16,500. the interest rate is quoted as 8.7 percent plus two points. a point on a loan is 1 percent (one percentage point) of the loan amount. quotes similar to this one are common with home mortgages. the interest rate quotation in this example requires the borrower to pay two points to the lender up front and repay the loan later with 8.7 percent interest. what rate would you actually be paying here?
Answers: 3
Do you know the correct answer?
Questions in other subjects:
English, 31.08.2020 01:01
History, 31.08.2020 01:01
