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it on simple interest to the European Union (EU). The prevailing interest rates gazetted from UK banks and Zimbabwean (ZW) banks are as follows: Deposit rate Lending rate UK 8% 10% ZW 20% 50% In addition, assume that the prevailing spot exchange rate is ZW/UK Pounds 130.00 – 145.00 And the number of days in a year is 360 days. Calculate the amount that would be receivable by Tuli Super Minerals if th

it on simple interest to the European Union (EU). The prevailing interest rates gazetted from UK banks and Zimbabwean (ZW) banks are as follows: Deposit rate Lending rate UK 8% 10% ZW 20% 50% In addition, assume that the prevailing spot exchange rate is ZW/UK Pounds 130.00 – 145.00 And the number of days in a year is 360 days. Calculate the amount that would be receivable by Tuli Super Minerals if th

Essentials Of Investments
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
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  1. Tuli Super Minerals of Manicaland exports raw diamonds valued at one million pounds (£1,000,000) on 180 days credit on simple interest to the European Union (EU). The prevailing interest rates gazetted from UK banks and Zimbabwean (ZW) banks are as follows:

 

Deposit rate

Lending rate

UK

8%

10%

ZW

20%

50%

            In addition, assume that the prevailing spot exchange rate is ZW/UK Pounds 130.00 – 145.00

            And the number of days in a year is 360 days.

Calculate the amount that would be receivable by Tuli Super Minerals if the money market hedge is applied 

 

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