The spot exchange rate for the Thai bhat is 33.14 bhat to the dollar. The Hotel Grand Chancellor Hobart will be able to repatriate profits from its luxury resort hotel in Phuket in five years. It has estimated the five-year forward rate at 38 bhat to the dollar. The risk-free rate in the Australia is 4% and Hotel Grand Chancellor Hobart uses an 11% risk premium for investments of this type. If the expected accumulated profits after five years are 100 million bhat, what is the present value in Australian dollars?
The spot exchange rate for the Thai bhat is 33.14 bhat to the dollar. The Hotel Grand Chancellor Hobart will be able to repatriate profits from its luxury resort hotel in Phuket in five years. It has estimated the five-year forward rate at 38 bhat to the dollar. The risk-free rate in the Australia is 4% and Hotel Grand Chancellor Hobart uses an 11% risk premium for investments of this type. If the expected
The spot exchange rate seems to be the current market price for exchanging one currency for others for currencies on the latest feasible value date. The normal settlement date for spot currency transactions is generally two business days following the transaction date.
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