The Wall Street Journal reported the following spot and forward rates for the Swiss franc ($/SF). Spot 30-day forward 90-day forward 180-day forward $0.8211 $0.8522 $0.8549 $0.8596 a. Was the Swiss franc selling at a discount or premium in the forward market? O Discount O Premium b. What was the 30-day forward premium (or discount) percentage? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) 30-day forward premium/discount % c. What was the 90-day forward premium (or discount) percentage? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

The Wall Street Journal reported the following spot and forward rates for the Swiss franc ($/SF). Spot 30-day forward 90-day forward 180-day forward $0.8211 $0.8522 $0.8549 $0.8596 a. Was the Swiss franc selling at a discount or premium in the forward market? O Discount O Premium b. What was the 30-day forward premium (or discount) percentage? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) 30-day forward premium/discount % c. What was the 90-day forward premium (or discount) percentage? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

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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If a firm's supplier has a credit policy of 1/10/45, what is the nominal cost of trade credit? a. 1% b. 99% c. 10.83% d. 11.05% e. None of the above
Assume the following information is available for the United States and Europe: Nominal interest rate Expected inflation Spot rate One-year forward rate a. Does IRP hold? IRP -Select- $ U.S. 4% 2% $ in this case. b. According to PPP, what is the expected spot rate of the euro in one year? Do not round intermediate calculations. Round your answer to three decimal places. EUROPE 6% 5% $1.13 $1.10 c. According to the IFE, what is the expected spot rate of the euro in one year? Do not round intermediate calculations. Round your answer to three decimal places. d. Reconcile your answers to parts (a) and (c). Parts a and c combined say that the forward rate premium or discount is [-Select- of the euro. ✓the expected percentage appreciation or depreciation
Please use this information to answer the question below: A US firm's expected Accounts Receivables in Euro Zone due in 1 year Current Spot Rate (SR) for EUR Annual interest rate in US (Rh) Annual interest rate in Euro Zone (RF) EUR 15,000,000 USD 1.25 5% O USD 17,578,125 OEUR 13,392,857 EUR 18,750,000 USD 16,741,071 12% If the firm uses money market hedge, one year from now, their accounts receivables will fetch them:
Assume the following information: Spot rate of U.S. dollar Quoted Price AUD1.2500/USD 180-day forward rate of U.S. dollar 180-day Australian interest rate (a periodic rate) 180-day U.S. interest rate (a periodic rate) AUD1.2800/USD 4.75% 3.10% A. What USD-denominated percent rate of return can a US investor earn if they attempt covered interest arbitrage? (to two decimal places like 6.54%) B. What AUD-denominated percent rate of return can an Australian investor earn if they attempt covered interest arbitrage? (to two decimal places like 6.54%) C. Given this information, who has a covered interest arbitrage opportunity? Answer either "Australian investors" or "U.S. investors". D. What changes in the 2 quoted prices above would likely occur to eliminate any further possibilities of covered interest arbitrage? (answer with just or 1) Spot rate of U.S. dollar 180-day forward rate of U.S. dollar
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.)
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. %
KA. On July 1, 2019, Great White North (GWN) Inc. purchased merchandise from a supplier in the U.S. for US$800,000 with terms requiring full payment by October 31, 2019. GWN has a July 31st year end. On October 31, 2019, GWN paid its supplier in full. Selected dates and spot rates are shown below: July 1, 2019 CDN $1.2150 July 31, 2019 CDN $1.2175 October 31, 2019 CDN $1.22 1) Prepare all journal entries on Settlement date. 2) Prepare all journal entries that would be prepared at year end.
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?
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
am. 216.

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