Suppose the price of wheat sold at a terminal elevator in Manitoba on 15 April 2021 was C$5.15 per bushel, and that the price of the March 2022 wheat futures contract was US$4.58 per bushel, and that the Canada-US exchange rate was US$0.71/C$1.00. Use this information to answer the following two questions: Given the above information, what was the unadjusted basis (to the second decimal, with rounding) on April 15, 2021? -$0.57 $0.57 -$0.92 None of the given answers $0.92 Given the above information, what was the adjusted basis (to the second decimal, with rounding) on April 15, 2021? -$1.30 -$1.90 None of the given answers $1.90 O $1,30

Suppose the price of wheat sold at a terminal elevator in Manitoba on 15 April 2021 was C$5.15 per bushel, and that the price of the March 2022 wheat futures contract was US$4.58 per bushel, and that the Canada-US exchange rate was US$0.71/C$1.00. Use this information to answer the following two questions: Given the above information, what was the unadjusted basis (to the second decimal, with rounding) on April 15, 2021? -$0.57 $0.57 -$0.92 None of the given answers $0.92 Given the above information, what was the adjusted basis (to the second decimal, with rounding) on April 15, 2021? -$1.30 -$1.90 None of the given answers $1.90 O $1,30

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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On December 20, 2023, Momeier Company (a U.S.-based company) sold parts to a foreign customer at a price of 165,000 rials. Payment is received on January 10, 2024. Currency exchange rates are as follows: DateU.S. Dollar per RialDecember 20, 2023$ 1.26December 31, 20231.23January 10, 20241.19 Required: How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier's 2023 income statement? How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier's 2024 income statement? a. The rial receivable exchange b. The rial receivable exchange S in U.S. dollar value, resulting in a foreign of in 2023. in U.S. dollar value, resulting in a foreign of in 2024.
If the spot rate is NZ$0.50/$ and the forward rate is NZ$0.55/$. The spot exchange rate and the forward rate are C$1.03/$ and C$1.07/$. Compute the percentage change in the NZS/C$ during this period. a. -5.89% b. 5.89% c. -5.56% d. 5.56%
Am. 117.
Assume that the British pound is selling in the United States at $1.5985 spot and $1.5939 in the 180-day forward market, and that the Canadian dollar is selling in the United States at $.7336 spot and $.7422 in the 180-day forward market. Both quotes are direct. Which of the following is correct? Show your calculations. the Canadian dollar is selling at 2.3 percent premium in the forward market the Canadian dollar is selling at 1.17 percent premium in the forward market the Canadian dollar is selling at 1.17 percent discount in the forward market the British pound is selling at .57 percent premium in the forward market
1. – Using the following information, determine each one of the theoretical Exchange Rates (E.R.) for December of year 02 according to the Relative PPP Theory. MARKET MARKET E.R. E.R. COUNTRY CURRENCY СРI CPI Dec-01 Dec-02 Dec-01 Dec-02 Mexico МХР 231.89 264.3546 19.56 20.15 Turkey TRY (Lira) 498 527.88 5.9419 6.07673 Australia AUD 989 1038.45 1.7759 1.81183 Japan JPY 678 745.8 105.866 113.978 United Kingdom GBP 905.26 986.7334 0.5991 0.617849 South Korea KRW (Won) 795.4 874.94 1,658.62 1,793.37 Canada CAD 523.12 554.5072 1.3736 1.4942 U.S.A. USD 1.5 1.56
Ganado Europe (A). Using facts in the chapter for Ganado Europe, assume the exchange rate on January 2, 2016, in Exhibit 11.5 dropped in value from $1.1400/€ to $0.8700/€. Recalculate Ganado Europe's translated balance sheet for January 2, 2016, with the new exchange rate using the current rate method as shown in the popup window,. What is the amount of translation gain or loss? a. What is the amount of translation gain or loss? Enter a positive number for a gain and negative for a loss. $ (Round to the nearest dollar.) Where should it appear in the financial statements? The translation gain (loss) for the year is added to the balance in the Cumulative Translation Adjustment (CTA) account.
Suppose the spot and three-month forward rates for the yen are ¥114.37 and ¥113.89, respectively. a. Is the yen expected to get stronger or weaker? b. What would you estimate is the difference between the inflation rates of the United States and Japan? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Yen expected to get strong or weaker b. Difference between the inflation rates %
Suppose Dassie Bank quoted the exchange rate of Singapore dollar in US$ at $0.60, the pound rate in US$ at $1.50, and the pound rate in Singapore dollars at S$2.6. For a US resident having $1,000 to do triangular arbitrage, she/he will end up withAnswerUS dollars after the arbitrage.
Suppose that you are the Chief Financial Officer of a corporation based in Germany (EUR is thehome currency), having operations globally in all the continents.In the performance of your estimations and calculations you have to analyze the exposures in theforeign currencies. In the appendix there is a table with downloaded information from theEuropean Central Bank (ECB)’s website, the exchange rates of each day of September 2020.Required:i. Present that information in a table for 5 currencies (freely decide whichcurrencies).ii. Discuss the fluctuations and how the exchange rates have changed from the firstto the last day of the period under investigation.iii. Discuss how the following activities of your company are expected to beinfluenced by the expected EUR appreciation for the last quarter of 2020.Explain your answers.i. Domestic sales;ii. Foreign sales denominated in domestic currency;iii. Foreign sales denominated in foreign currency;iv. Importing goods for domestic sales…
An investor in England purchased a 91-day $1,000 par T-bill for $987.65. At that time, the exchange rate was $1.75 per pound. At maturity, the exchange rate was $1.83 per pound. What was the investor’s holding period return in pounds?
Suppose that today is 13 August 2019 and the current exchange rate is HKD 6.20 per AUD 1.00. The figure below shows your prediction with respect to the HKD's movements relative to the AUD between now and mid-September 2019. HKD per AUD 7.2 6.8 6.4 6.0 13/08 18/08 23/08 28/08 2/09 7/09 12/09 today Note: HKD = Hong Kong Dollar; AUD = Australian Dollar. %3D %3D You intend to capitalize on your prediction by using the 15/9/2019-maturity forward contract, which is currently priced at HKD 6.00 per AUD 1.00. Which of the following are you most likely to undertake today to capitalize on your prediction? (Select the best answer.) O a. Long forward contract to buy AUD O b. Short forward contract to sell AUD O C. Long forward contract to sell HKD O d. Either (a) or (c) will work
Ganado Europe (C). Using facts in the chapter for Ganado Europe, assume the exchange rate on January 2, 2016, in Exhibit 11.5 appreciated from $1.2900/€ to $1.5800/€. Calculate Ganado Europe's translated balance sheet for January 2, 2016, with the new exchange rate using the current rate method as shown in the popup window, a. What is the amount of translation gain or loss? b. Where should it appear in the financial statements? Data table a. What is the amount of translation gain or loss? Enter a positive number for a gain and negative for a loss. (Round to the nearest dollar.) (Click on the following icon in order to copy its contents into a spreadsheet.) EXHIBIT 11.5 Ganado Europe's Translation Loss After Depreciation of the Euro: Current Rate Method Assets Cash In Euros (€) (US$/euro) December 31, 2015 Exchange Rate Translated Accounts (US$) January 2, 2016 Exchange Rate (US$/euro) Translated Accounts (US$) 1,500,000 1.2900 $1,935,000 1.5800 $2,370,000 Accounts receivable Inventory…

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