The Wall Street Journal reported the following spot and forward rates for the Swiss franc ($ per SF). $ 0.8210 $ 0.8520 Spot 30-day forward 90-day forward 180-day forward a. Was the Swiss franc selling at a discount or premium in the forward market? Premium Discount $ 0.8548 $ 0.8595 b. What was the 30-day forward premium (or discount) percentage? Note: Do not round Intermediate calculations. Input your answer as a percent rounded to 2 decimal places. 30-day forward premium/discount 96

The Wall Street Journal reported the following spot and forward rates for the Swiss franc ($ per SF). $ 0.8210 $ 0.8520 Spot 30-day forward 90-day forward 180-day forward a. Was the Swiss franc selling at a discount or premium in the forward market? Premium Discount $ 0.8548 $ 0.8595 b. What was the 30-day forward premium (or discount) percentage? Note: Do not round Intermediate calculations. Input your answer as a percent rounded to 2 decimal places. 30-day forward premium/discount 96

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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Pets Store Inc. sells on terms of 3/20, net 35. What is the effective annual cost of trade credit under these terms? Use a 365-day year. Round answer to two decimal places.
2. Complete the following table specifying the under and over valuation for each set of currencies. Show all your procedure for each answer: Real E.R. Theoretical E.R. % of % of Undervaluation Overvaluation (specify currency) (specify currency) USD 1.14 / EUR USD 1.52 / Punt TRY 4.85 / USD MXP 17.90 / USD USD 0.012 / JPY ¥ GBP {0.629 / USD USD 1.70 /EUR USD 1.50 / Punt TRY 4.73 / USD MXP 18.15 / USD USD 0.019/ JPY ¥ GBP (0.613/USD
Consider the following independent scenarios: On 9/1, company accepts a P10,000, 5%, 8-month note receivable On 3/1, a company accepts a P20,000, 8%, 6- month note receivable On 6/15, a company accepts a P15,000, 10%, 4 -month note receivable On 8/15, a company accepts a P12,000, 6%, 4 -month note receivable Required: Assuming a December 31 year-end, calculate current-year interest revenue for each scenario. Show your solution
Q3.
1) Trade credit terms of 2/10, net 90 are available. Calculate the cost of trade credit whenpayment is made on the net due date using the APR. Use a 360 day year 2) Trade credit terms of 2/10, net 90 are available. Calculate the cost of trade credit whenpayment is made on the net due date using the EAR (also known as APY). Use a 360day year.
Company X sells on a 2/15, net 60, basis. Company Y buys goods with an invoice of $4,500. a. How much can company Y deduct from the bill if it pays on day 15? (Do not round intermediate calculations.) b. How many extra days of credit can company Y receive if it passes up the cash discount? c. What is the effective annual rate of interest if Y pays on the due date rather than day 15? (Use 365 days in a year. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
[EXCEL]Spot rate: Convert the following indirect quotes to the appropriate American quotes. (a) £0.6917/$ (b) ¥104.28/$ (c) SF 1.0769/$
Cost of Trade Credit Calculate the nominal annual cost of trade credit under each of the following terms. Assume a 365-day year. Do not round intermediate calculations. Round your answers to two decimal places. 1/15, net 25. % 2/10, net 55. % 3/10, net 45. % 2/10, net 45. % 2/15, net 35. %
Cost of Trade Credit Calculate the nominal annual cost of trade credit under each of the following terms. Assume a 365-day year. Do not round intermediate calculations. Round your answers to two decimal places. 1/15, net 25. % 2/10, net 60. % 3/10, net 50. % 2/10, net 50. % 2/15, net 40. %
Required: a. A firm currently offers terms of sale of 3/25, net 50. Calculate the effective annual rate. a-1. Calculate the effective annual rate if the terms are changed to 4/25, net 50. a-2. What effect does an increase in the discount rate have on the implicit interest rate charged to customers that pass up the discount? b-1. Calculate the effective annual rate if the terms are changed to 3/35, net 50. b-2. What effect does a decrease in the extra days of credit have on the implicit interest rate charged to customers that pass up the discount? c-1. Calculate the effective annual rate if the terms are changed to 3/25, net 40. c-2. Is there any difference between the implicit interest rate for terms of 3/35, net 50 and 3/25, net 40?
Given: So = INR 83/US$ F90 days = INR 83.2834/US$ 90-day iIndia = 6.91% 90-day ius = 5.34% a. there is no interest rate parity O b. there is total interest rate parity Oc. there is a possibility of triangle arbitrage O d. there is approximate interest rate parity
Complete the following table by finding the net price factor, single equivalent discount, trade discount (in dollars), and net price (in dollars). Round the net price factor and single equivalent discount to five decimal places, and the trade discount and net price to the nearest cent, when necessary. List Price: $650.70 Trade Discount Rate: 31/15/5

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