Because it is unlikely she will be able to visit you this year, your wealthy Canadian aunt wants to send you a present for your birthday. You expect she will give you CAD 4664 in 10 months. Having taken this course, you know you can lock in the AUD rate for this CAD receivable using a money market hedge. If (annualized) 10-month interest rates in the Canada are 7%, 10-month interest rates in Australia are 3.2%, and the current spot rate is 1.8 AUD/CAD, what is the locked in AUD value of this birthday present? Select the closest answer. a. 1.8555 b. 8144.0050 c. 8704.3256 d. 2671.0317 e. 8654.1429

Because it is unlikely she will be able to visit you this year, your wealthy Canadian aunt wants to send you a present for your birthday. You expect she will give you CAD 4664 in 10 months. Having taken this course, you know you can lock in the AUD rate for this CAD receivable using a money market hedge. If (annualized) 10-month interest rates in the Canada are 7%, 10-month interest rates in Australia are 3.2%, and the current spot rate is 1.8 AUD/CAD, what is the locked in AUD value of this birthday present? Select the closest answer. a. 1.8555 b. 8144.0050 c. 8704.3256 d. 2671.0317 e. 8654.1429

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

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Quantitative Problem: You need $18,000 to purchase a useel car. I Your wealthy uncle is willing to lend you the money as an amortized loan. He would like. would like you to make annual payments for 4 years with the first payment to be made one year from today. He requires on 8% anual return. a) What will be your amual loan payments? Do not round intermediate calculations. Round your answer to the nearest cent. b) How much of your payment will be first applied to interest and to principal repayment? Do not round intermediate calculations. Round to the nearest cent. your answers Interest Principal repayment m
Suppose you just bought an annuity with 10 annual payments of $16,500 at a discount rate of 13.75 percent per year. a. What is the value of the investment at the current interest rate of 13.75 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What happens to the value of your investment if interest rates suddenly drop to 8.75 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. What happens to the value of your investment if interest rates suddenly rise to 18.75 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
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You are considering investing in a security that will pay you RM1,000 in 'n' years. Required: How long do you have to invest if you start the investment of RM250 today with the appropriate discount rate of 10 percent quarterly? i. ii. Assume these securities sell for RM365, in return for which you receive RM1,000 in 30 years. What is the rate of return investors earn on this security if they buy it for RM365?
you want to go to Europe 4 years from now, and you can save $3300 per year, beginning one year from today. You plan to deposit the funds in a mutual fund that you think will retum 8.5% per year. Under these conditions, how much would you have in your account by the time you are ready for your trip? O a. $12, 344.53. b. $13,799.76 O c. $15, 765.34 O d. $11, 235.11 • e. $14,980.40
Bank of America is currently selling a security that will pay $300 one year from today, $400 2 years from today and $800 at some undisclosed time in the future. Find the time at which the $800 payment is made if the interest rate is 11% and BofA is selling the security for $1000. Round this number of years (from part a) to the nearest year. Assuming that the last payment is made at the end of the year you found (after rounding), find the future value of the security at that time (you can ignore the $1000 price of the security). Assume the interest rate is 11%.
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