FOUND.OF FINANCIAL MANAGEMENT-ACCESS
17th Edition
ISBN: 9781260519969
Author: BLOCK
Publisher: MCG
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Chapter 20, Problem 8DQ
Summary Introduction
To explain: The treatment of
Introduction:
Goodwill:
In terms of accounting, goodwill may be defined as an intangible asset that arises on the account of the purchase of one company by another. It is recorded when the purchase price is higher than the sum of all the fair market values of the assets and liabilities.
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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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I mistakenly submitted blurr image please comment i will write values.
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please dont Solve with incorrect values otherwise unhelpful.
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