Assume that you have invested $100,000 in Japanese equities. When purchased the stock's price and the exchange rate were V100 and V100/$1.00respectively. At selling time, one year after purchase, they were Y110 and V110/51.00. If the investor had sold V10,000,000 forward at the forwardexchange rate of V105/$1.00 the dollar rate of return would be:ⒸA. 28.00%●B.-9.09%OC 4.32%OD 27.27%

The relative worth of two currencies, or the amount of one currency that may be exchanged for one…

Assume that you have invested $100,000 in Japanese equities. When purchased the stock's price and the exchange rate were 100 and $100/$1.00 respectively. At selling time, one year after purchase, they were V110 and V110/51.00. If the investor had sold V10,000,000 forward at the forward exchange rate of V105/$1.00 the dollar rate of return would be: A. 28.00% 8.-9.09% OC 4.32% OD.-27.27 %

Assume that you have invested $100,000 in Japanese equities. When purchased the stock's price and the exchange rate were 100 and $100/$1.00 respectively. At selling time, one year after purchase, they were V110 and V110/51.00. If the investor had sold V10,000,000 forward at the forward exchange rate of V105/$1.00 the dollar rate of return would be: A. 28.00% 8.-9.09% OC 4.32% OD.-27.27 %

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

what is the rate of return from t to t+1 on abond that is priced at 2,000 initially, provides a coupon paymentat time t+1of 40$ and has its price rise to 2,100 at time t+1
Suppose our corporation can borrow in EUR at 0.06% for 1 year. The current exchange rate is USD1.10/EUR, and the EUR is expected to appreciate against the dollar to USD1.2/EUR. What is the interest rate cost of the bond in USD? Please enter your answer as % -- e.g. if your answer is 2.34% type in 2.34.
am. 289.
The expected return on a share of ExxonMobil stock in the U.S. is 15.6% while the expected return on a share of Royal Dutch Shell stock is 12.6% in the Netherlands. If the pure rate of return is 2% in both countries and the required risk premium is 6% for each company's stock, what is the long-term expected inflation rate in each country if the multiplicative form of the Fisher model is used in making the calculations?
Suppose that a commodity’s respective forward prices for 1 year and 2 years are $150 and $158. The 1-year effective annual interest rate is 5.9%, and the 2-year interest rate is 6.6%. You will pay a fixed rate of $153.85906 in a 2-year swap and receive the floating rate. At the time you enter the swap contract, its value to you is... A.$0.0084 B.$–0.0084 C.$0.0051 D.. $–0.0051 E.$000000
Suppose an investor purchases $114,000 of TIPS with a 6.14% coupon rate and 12 years until maturity. How much with the second coupon payment be if the level of CPI adjusts to the levels below? Today 6 months from now 12 months from now 18 months from now 228 246.2 256.1 265.5
Q6. You would like to invest in two shares A and B. The return on these shares over the next year depends on the state of economy, which will be described as “Boom”, “Normal”, “Slow” and “Recession”. The table below shows the probability of each of these states of economy, and the expected return on each share given each possible state of the economy. The correlation coefficient between shares A and B is 0.5. State of the economy Probability A Return B Return Boom 0.20 0.25 0.21 Normal 0.40 0.16 0.12 Slow 0.25 0.10 0.08 Recession 0.15 - 0.06 0.05 What is the expected return on A and B shares? What is the standard deviation of A and B shares? What is the expected return on portfolio comprised of 55% invested in share A and the balance in share B? What is the standard deviation on portfolio comprised of 55% invested in share A and 45% invested in share B?
Assuming that interest rate parity holds. In both the spot market and the 90 day forward market, 1 Japanese ye equals .0089 dollar. In Japan, 90-day risk free securities yield 4.3%. What is the yield on 90-day risk free securities in the US? Do not round intermediate calculations. Round your answer to two decimals places.
Really need help
(35) (P-C Parity Arbitrage) A European Call price is C= $ 3.50, on a ZERO dividend. A similar Put price is P= $ 2.50. The stock price S= $ 51 , strike price X= S 50 , T= 1 year, and R = 2%. (a) Determine what the CALL Price SHOULD be. (b) How much should your arbitrage profit be? (c) Focusing on Real vs. Synthetic Call, specify ALL time 0 trade details. (d) At expiration in 1 year at T, show the ending details { both if S is HIGH or LOW }.
1. A company’s share is currently traded at the price of £18.49. A dividend on this share is paid continuously at rate q and is reinvested in the share. Two options are available on the market with the same strike price of £18 and the same maturity time of 6 months. European Call option is worth of £1.72 and a European Put option is priced at £1.52. Assuming the continuously compounded interest rate is 16%, find the dividend rate.
2

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS