Quantitative Problem 1: Suppose that 1 Swedish krona could be purchased in the foreign exchange market today for $0.13. If the krona appreciated 9% tomorrow against the dollar, how many kronas would a dollar buy tomorrow? Do not round intermediate calculations. Round your answer to two decimal places. ____ kronas
Quantitative Problem 1: Suppose that 1 Swedish krona could be purchased in the foreign exchange market today for $0.13. If the krona appreciated 9% tomorrow against the dollar, how many kronas would a dollar buy tomorrow? Do not round intermediate calculations. Round your answer to two decimal places.
____ kronas
Quantitative Problem 2: Suppose the exchange rate between the U.S. dollar and the South African rand was 14 rand = $1 and the exchange rate between the U.S. dollar and the Israeli shekel was 1 shekel = $0.29. What was the exchange rate between the South African rand and the Israeli shekel? Do not round intermediate calculations. Round your answer to two decimal places.
______ rands per shekel
Quantitative Problem: Assume that interest rate parity holds. In the spot market 1 Japanese yen = $0.008, while in the 180-day forward market 1 Japanese yen = $0.0088. 180-day risk-free securities yield 1.05% in Japan. What is the yield on 180-day risk-free securities in the United States? Do not round intermediate calculations. Round your answer to two decimal places.
_______ %
Quantitative Problem: In the spot market, 4.04 Brazilian reals can be exchanged for 1 U.S. dollar. An Apple iPad Air costs $500 in the United States. If
_______reals
Quantitative Problem: International Machinery Company (IMC) is a Swedish multinational manufacturing company. Currently, IMC's financial planners are considering undertaking a 1-year project in the United States. The project's expected dollar-denominated cash flows consist of an initial investment of $2,100 and a
a. If the interest parity holds, what is the forward exchange rate of Swedish kronas per U.S. dollar? Do not round intermediate calculations. Round your answer to four decimal places.
________ Swedish kronas per U.S. dollar
b. If IMC undertakes the project, what is the
NPV: _____ Swedish kronas
Rate of return: ______%
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