EBK INVESTMENTS
11th Edition
ISBN: 9781259357480
Author: Bodie
Publisher: MCGRAW HILL BOOK COMPANY
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Chapter 23, Problem 5CP
A
Summary Introduction
To calculate: Theoretical price of future contract for 6 months Japanese yen/ U.S. dollar currency futures contract using the data given.
Introduction: A P.I is a banker in Japanese bank. She collected some data to calculate the future price of japans yen / U.S dollars for 6 months. The exchange rate is ¥124.30/$1.00 with interest rate in Japan is 0.10% and in U.S is 3.80%.
B
Summary Introduction
To calculate: Arbitrage profit to borrow the $1 million dollar to purchase Japanese yen.
Introduction: A P.I again reviews the future price of 3 months and she noticed that the interest rate has increased 0.50%. Here is an opportunity of arbitrage gain to borrow the $1million dollar to purchase Japanese yen.
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You are thinking of inving in Tikki's
Torches, Inc. You have only the following
information on the at year-end 2008:
Net income0.000
Total debt
12.2 million
Debt ratio 42%
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a. 1.79%
b. 10.14%
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Chapter 23 Solutions
EBK INVESTMENTS
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