Which of the following involves a financial outflow from the U.S. economy? a.returns paid on U.S. investments in France b.returns paid on U.S. investments in France c.Chinese investors buy real estate across the U.S. d.U.S. firms buying logging rights to China's forests

In the economy there are outflows and inflows to economy because investors may invest outside and…

Answered: Which of the following involves a…

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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You are the manager of a U.S. company situated in Los Angeles and manages the import/export division of the company. The company distributes (resells) a variety of consumer products imported to the U.S.A from Europe and also exports goods manufactured in the U.S.A. to Canada. Therefore, your company is very much dependent an the impact of current and future exchange rates on the performance of the company. Scenario 1: You have to estimate the expected exchange rates between your home currency and the other currencies of the major other countries that you deal with in terms of bath imports and exparts. The reason is that increases in the values of other currencies compared to the U.S. Dollar may impact your imports negatively, whilst it may on the other hand, be good for exports. To do this estimate, you obtain the following spot exchange rate information: €/S CADS/S 0.87616 1.30779 You also obtain the following annual risk free rates applying in the countries: U.S.A. 2.660% France…
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	a.	returns paid on U.S. investments in France
	b.	returns paid on U.S. investments in France
	c.	Chinese investors buy real estate across the U.S.
	d.	U.S. firms buying logging rights to China's forests

Which of the following involves a financial outflow from the U.S. economy? a. returns paid on U.S. investments in France b. returns paid on U.S. investments in France c. Chinese investors buy real estate across the U.S. d. U.S. firms buying logging rights to China's f