PLEASE SHOW WORK! 1.The exchange rate between euro ( ) and sterling (£) is /£ =
ID: 2757722 • Letter: P
Question
PLEASE SHOW WORK!
1.The exchange rate between euro ( ) and sterling (£) is /£ = 1.500 or 1.50/£. What is the £/ ?
£0.67/
£1.50/
£3.0/
£1.33/
none of the above
2.The exchange rate between euro ( ) and sterling (£) is /£ = 1.500 or 1.50/£. What is the £/ ?
£0.67/
£1.50/
£3.0/
£1.33/
none of the above
3.For this and the next 4. Suppose there is an interest rate spread of 1% between the United States and South Africa (S.A.). The yield on a one-year U.S. Treasury security is 5% (rd = 5%) while the yield on a comparable South African security is 6% (rF = 6%). You wish to invest $50,000. The indirect quote for the rand-dollar (R/$) spot exchange rate is 7 South African rand (R7) per dollar. Suppose you invest your funds in U.S. securities for 6 months. Calculate the future value of your investment.
$51,250
$53,000
$51,500
$50,500
None of the above
If you chose, instead, to invest your funds in South African securities for 6 months, what is the future value of your investment?
R 360,500
R 358,750
R 53,000
R 51,500
R 371,000
To cover your South African investment, you agree today to exchange the South African rand earnings in 6 months at the 6-month forward exchange rate of R7.125. How much will you receive in U.S. dollars in 6 months?
$2,568,562.50
$51,500
$49,122.81
$50,596.49
None of the above
Explanation / Answer
1)
1)
Exchange rate between £/€:
= 1÷Exchange rate between€/£
= 1÷1.5
= £0.67/€1
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.