Quartzite. The spot rate for Mexican pesos is Ps12.44 = $1.00. If the U.S.-based company Quartzite Inc. buys Ps546,000 spot from its bank on Friday, how much must Quartzite pay and on what date? How much must Quartzite pay? The cost in US$ is $ (Round to the nearest cent.) On what day? (Select from the drop-down menus.) Spot transactions are settled in business days, so in this case, ID

Quartzite. The spot rate for Mexican pesos is Ps12.44 = $1.00. If the U.S.-based company Quartzite Inc. buys Ps546,000 spot from its bank on Friday, how much must Quartzite pay and on what date? How much must Quartzite pay? The cost in US$ is $ (Round to the nearest cent.) On what day? (Select from the drop-down menus.) Spot transactions are settled in business days, so in this case, ID

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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The current spot rate for USD/GBP is 1.058 1.086. If you were to buy £4,799,207 worth of dollars and then sell them five minutes later, how much would the dealer make on your transactions? I
The treasurer of a major U.S. firm has $31276878 to invest for three months. The annual interest rate in the United States is 0.35% per month. The interest rate in Great Britain is 0.59% per month. The spot exchange rate is £0.72, and the three-month forward rate is £0.74. Ignoring transaction costs, what would be the NPV of investing in Great Britain as opposed to invest in the U.S.? NOTE: Enter the number rounding to four decimal places
K (Foreign exchange arbitrage) You own $7,000. The dollar rate in Tokyo is ¥215.9372/$. The yen rate in New York is given in the following table: Selling Quotes for Foreign Currencies in New York Country-Currency Japan-yen Contract Spot 30-day 90-day (Click on the icon in order to copy its contents into a spreadsheet.) Are arbitrage profits possible? Set up an arbitrage scheme with your capital. What is the gain in dollars? The net View an example $/Foreign Currency "Assuming no transaction costs, the rates in Tokyo and New York are out of line. Therefore, arbitrage profits are possible." The statement above is true (Select from the drop-down menu.) 0.004698 0.004741 0.004782 Get more help - ... from arbitrage would be $ (Round to the nearest cent.) Clear all Check answer
Suppose that Baltimore Machinery sold a drilling machine to a Swiss firm and gave the Swiss client a choice of paying either $11,000 or SF16,500 in three months. Required: Baltimore Machinery effectively gave the Swiss client a free option to buy up to $11,000 using Swiss francs. What is the "implied" exercise exchange rate? Note: Round your answer to 4 decimal places. Implied exercise rate
Suppose that Retrojo Inc. is a U.S. based MNC that will need to purchase F$2.00 million (Fijian dollars, F$) worth of imports from Fiji in 90 days. Currently, the spot rate for the Fijian dollar is $0.80 per F$. Suppose that Retrojo negotiates a forward contract with a bank, which commits it to purchasing Fijian dollars at F $2,000,000.00 at $0.80 per Fijian dollar in 90 days. Thus, Retrojo knows with certainty that it will need F$2,000,000.00×$0.80 per Fijian dollars =$1,600,000.00 for this exchange. Assume the Fijian dollar depreciates over this time period to $0.67 per Fijian dollar. If this were the case the outside of the contract only (U.S. dollars) would be needed to exchange for the required F$2,000,000.00.
how to solve this?
Suppose that you are a currency speculator, based in the U.S., att January 1st, the spot rate for the Canadian dollar is $0.68. This is have C$160,000.00 to use on these positions. Suppose that on February 10th, the Canadian dollar depreciates (a In order to purchase C$160,000.00 in spot market, you will need $107,200.00 alize on a possible depreciation of the Canadian dollar (C$). On t which futures contracts for Canadian dollars are being sold. You $139,360.00 $128,640.00 $150,080.00 d) to $0.67 in the spot market. (U.S. dollars) for the exchange.
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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 purchasing power parity (PPP) holds, what should be the price of the same iPad Air in Brazil? Do not round intermediate calculations. Round your answer to the nearest whole number. ___ reals
A U.S. consumer observes that a golf club costs $200. Currently in the spot market, 1 eurocan be exchanged for $1.1924. If purchasing power parity (PPP) holds, how many eurosshould you expect to pay for the same golf club in Europe?
Suppose your company imports computer motherboards from Singapore. The exchange rate is $1.4073 per Singapore dollar. You have just placed an order for 35,062 motherboards at a cost to you of S158 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $113 each. Calculate your profit if the exchange rates goes down by 14.51% over the next 90 days.
Suppose your company imports computer motherboards from Singapore. The exchange rate is $1.3595 per Singapore dollar. You have just placed an order for 39328 motherboards at a cost to you of S146 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $118 each. Calculate your profit if the exchange rates goes down by 12.23% over the next 90 days. NOTE: Enter the number rounding to four DECIMALS. If your decimal answer is 0.034576

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