3. Disbursement float in pesos if the entity issues checks 4. Annual return on the disbursement float 5. Cost of the checking account for the first year

Q: One-year Treasury bills currently earn 2.90 percent. You expect that one year from now, 1-year…

A: Calculate the current rate on 3-year treasury securities as follows:

Q: You plan to make a total of 7 deposits of $11,000 each year with the first payment being made one…

A: Future Value of Annuity = Future Value = P x (1+i)n

Q: 2. If the TVM is the only consideration, what nominal rate will cause all of the banks to provide…

A: The objective of the question is to find the nominal rate that will cause all of the banks to…

Q: Sherman’s Sherbet currently takes about 6 days to collect and deposit checks from customers. A…

A: Collection average = $15,000 Days of collection = 6 Reduced time = 3 Interest rate = 0.02%

Q: Which do you​ prefer: a bank account that pays 5.0% per year​ (EAR) for three years or a. An account…

A: The following future value formula will be used:

Q: Two banks are offering different investment opportunities. Bank A offers an account that pays…

A: Calculate APY of Bank A as: APY=1+rnn-1where, r=rate of interestn=number of periods Bank…

Q: Which do you prefer: a bank account that pays 5.5% per year (EAR) for three years or a. An account…

A: Current EAR is 5.5% per year Time Period is 3 years Case-a: When interest rate is 2.8% every six…

Q: By using a lock box system, a firm is able to reduce its float by 3 days. Given an annual interest…

A: A lockbox in float reduction refers to a specialized bank account used for collecting and processing…

Q: An investment bank can borrow or lend at LIBOR. Suppose that the 6-month rate is 5% and the 12-month…

A: - 6-month LIBOR rate = 5% (continuously compounded)- 12-month LIBOR rate = 8% (continuously…

Q: Suppose a bank enters a repurchase agreerment in which it agrees to sell Treasury securities to a…

A: Sale Price = $9,99,838 Buy Back Price = $10,000,073…

Q: How much will your investment be worth in 17 years at each bank?

A: Time value of money (TVM) means that the amount received in the present will have more value than…

Q: Mansukhbhai

A: The objective of this question is to find out how many months it will take to pay off an unpaid…

Q: The treasurer of a small bank has borrowed funds for 3 months at an interest rate of 5.50% and has…

A: We have to find the break even 6 months forward rate, so that hedge has no incremental cost.

Q: One-year Treasury bills currently earn 3.80 percent. You expect that one year from now, 1-year…

A: Liquidity premium theory states that the securities with lower liquidity should provide with an…

Q: NewBank decides to invest $45 million in 30-day T-bills. The T-bills are currently trading at…

A: T-bills are money market instruments issued by the government of country to raise short term…

Q: Marcus is trying to decide which checking account to open.  Bank A's account pays 1.6%, compounded…

A: When the bank borrows money from the depositors which is said to be the deposited fund by the…

Q: Simmons Corporation can borrow from its bank at 21 percent to take a cash discount. The terms of the…

A: Terms of cash discount = 2.5/18 net 55Discount rate = 2.5%Discount period (in days) = 18Final…

Q: Marcus is trying to decide which checking account to open.  Bank A's account pays 1.6%, compounded…

A: To compare the returns on two different accounts, we need to calculate the effective annual interest…

Q: Dome Metals has credit sales of $468,000 yearly with credit terms of net 60 days, which is also the…

A: Firm often make strategies to collect account receivables outstanding balance at an early point of…

Q: A T-bill with face value $10,000 and 87 days to maturity is selling at a bank discount ask yield of…

A:

Q: Ubu Bank has the following assets and liabilities :   Asset X has a maturity of 3 years and a…

A: The difference between the weighted average maturity of a bank's assets and the weighted average…

Q: Your firm has an average receipt size of $65. A bank has approached you concerning a lockbox service…

A: Savings= Average Receipt*Number of Checks Per Day*Time Saved= 65*8700*2= 1131000

Q: please answer part b and c of the question. The screenshot is the answer to part one  b. If the TVM…

A: As per the given information: Amount deposited in each bank - $3,500Nominal rate of interest - 10%

Q: You've worked out a line of credit arrangement that allows you to borrow up to $70 million at any…

A: I have provided a detailed answer in the Explanation section.Explanation:Let's break down the…

Q: ZLX is seeking a bank to place short-term deposits at a good rate.  Bank A is offering 3.5% APR…

A: EAR stands for an effective annual rate, which is used to calculate the real adjusted necessary…

Q: Your broker is offering 2.2 percent compounded daily on its money market account. If you deposit…

A: The amount in the account after n years is calculated using the future value formula. Future value =…

Exchange Rate Risk

It is the possibility that the value of a currency will fluctuate in the future. In the wake of globalization, business establishments have increasingly ventured into international markets. The volume of international trade has prospered excellently in the near past and is expected to be more affluent in the future. The use of exchange-traded derivative financial instruments has been multi-folded to provide for the requirements of various MNCs and offshore potential investors. Most banks and financial institutions have helped integrate the global economies. Our Government has introduced some bold and extreme measures to fulfil the purpose behind the fiscal, industrial, and monetary policies. The enactment of GST is a huge step towards streamlining the taxation system of the country. Owing to Covid-19, this aspect of corporate risk management has become critical.