EBK PFIN
6th Edition
ISBN: 8220103648844
Author: Billingsley
Publisher: CENGAGE L
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Chapter 1, Problem 1LO
Summary Introduction
To discuss: Benefits of personal financial planning techniques while managing person X finance.
personal financial planning is a systematic process of considering important elements individual’s financial affairs and aimed to fulfil their financial goals.
Expert Solution & Answer
Explanation of Solution
The advantages of utilising personal financial planning techniques while managing person X finance:
The following are the benefits of using
- Avoid debts: The main benefit of managing personal finance efficiently is to avoid debts. By reducing usage of credit cards helps to reduce expenses and try to save money for future.
- More savings: By following proper management plans try to save money for future purposes it will helps during the time of retirement.
- A proper financial plan will helps to develop an abundance mind set.
- Future visibility.
- It improves risk management.
- It helps to improve the standard of living
- It ensures one to spend money wisely
- It generate wealth maximization
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Suppose that you are a U.S.-based importer of goods from the United Kingdom. You expect the value of the pound to increase against the U.S. dollar over the next 30 days. You will be making payment on a shipment of imported goods in 30 days and want to hedge your currency exposure. The U.S. risk-free rate is 5.5 percent, and the U.K. risk-free rate is 4.5 percent. These rates are expected to remain unchanged over the next month. The current spot rate is $1.90.
1.Move forward 10 days. The spot rate is $1.93. Interest rates are unchanged. Calculate the value of your forward position. Do not round intermediate calculations. Round your answer to 4 decimal places.
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