Provide comprehensive explanation of foreign exchange market

Assignment Help Finance Basics
Reference no: EM131134488

Finance Forum Post

I need a 250-word reply to each of the following two finance forums. (500-words total). MUST BE ORIGINAL!

Forum Post 1

Provide a comprehensive explanation of foreign exchange markets. Be sure to include examples of how forward markets and spot markets operate.

Forum Post 2

While you were visiting London, you purchased a Jaguar for £35,000, payable in three months. You have enough cash at your bank in New York City, which pays 0.35 percent interest per month, compounding monthly, to pay for the car. Currently, the spot exchange rate is $1.45/£ and the three-month forward exchange rate is $1.40/£. In London, the money market interest rate is 2.0 percent for a three-month investment.

There are two alternative ways of paying for your Jaguar.

a. Keep the funds at your bank in the United States and buy £35,000 forward.

b. Buy a certain pound amount spot today and invest the amount in the U.K. for three months so that the maturity value becomes equal to £35,000.

Analyze the alternatives presented and make a recommendation on purchasing the Jaguar. Be sure to provide support for your recommendation - why do you prefer the stated alternative? What are the advantages of the alternative that you have selected?

Reference no: EM131134488

Questions Cloud

Relationship between substance abuse and crime : The goals of treatment of substance abuse disorders within the criminal justice system. The impact of lack of such treatment on offenders on the prospect of recidivism upon release. Provide a brief summary of the two research studies you reviewed t..
The stanford binet intelligence quotient : The Empirical Rule One measure of intelligence is the Stanford Binet Intelligence Quotient (IQ). IQ scores have a bell-shaped distribution with a mean of 100 and a standard deviation of 15.
Describe differences between immigrants and refugees : What kinds of conversational rules are in effect when many African Americans converse with White Americans? Describe at least three differences between immigrants and refugees.
Wage and price effects of immigration : Suppose that farm workers are responsible for onefourth of the production cost of food. What are the implications of immigration for the cost of producing food and its price?
Provide comprehensive explanation of foreign exchange market : Provide a comprehensive explanation of foreign exchange markets. Be sure to include examples of how forward markets and spot markets operate.
Dangers for society which depends on computer screens : what dangers are there for society which depends on computer screens rather than face to face contact for its main means communication.
Discuss what the research shows about stress : Discuss what the research shows about stress and its influence on the development of the mental disorder. You are to include a discussion of either the diathesis-stress model or the reciprocal gene-environmental model. (At minimum 1 paragraph)
Do you feel that the federal reserve bank is necessary : Do you feel that the Federal Reserve Bank is necessary? Do you feel that it is currently doing its job? What are some improvements you can propose? This answer should be between 100-150 words.
The degrees of freedom for the numerator and the denominator : A sales analyst wants to determine whether there is a difference in the mean monthly sales of a company's four sales regions. Several salespersons from each region are randomly selected and they provide their sales amounts (in thousands of dollars..

Reviews

Write a Review

Finance Basics Questions & Answers

  Used effectively in a risk management program

Avoidance is a risk-control technique that can be used effectively in a risk management program.

  Determine the goal of negotiating

Determine the goal of negotiating? Discuss and explain why is planning critical to the negotiation processand when would an organization negotiate for an item or product instead of releasing a simple purchase order?

  What is the net revenue per patient

Using the Patient Cost Analysis Form in the Appendix from your "Revenue Management Manual" text (Form A26), calculate your current costs per patient using the following information. What is the Net Revenue per patient?

  Present value help

Basic Buildings Inc. has decided to go public with a $5,000,000 new equity issue. Its investment bankers agreed to take a smaller fee now (6 percent of par value versus 10 percent) in exchange for a 1-year option to purchase an additional 200,000 ..

  Averages of small samples not individual measurements

Mean charts and range charts complement one another, one detecting shifts in process average, the other detecting shifts in process dispersion.

  What is the rate of return on your savings

Today completes your 17th year of saving and you now have $6,528.91 in this account. What is the rate of return on your savings?

  Superior asset allocation ability

A mutual fund with a beta of 1.1 has outperformed the S&P500 over the last twenty years. Does the mutual fund manager; have had superior stock selection ability.

  What is the eay of the bonds after issuance costs

8 years ago, your company issued $10M worth of 10-year semiannual bonds that pay a 10% coupon rate. The bond is currently selling for $1,030 per $1,000 bond. The issuance cost was 2%. Today, your firm borrows $8M in secured debt at 6% interest ..

  What is the pv if you buy

The truck will be sold at the end of 4 years for $33,000. a. Calculate present value if the discount rate is 10%: What is the PV if you Lease? What is the PV if you Buy?

  Capital structure is irrelevant if -and only if

capital structure is irrelevant if -and only if firm-issued debt is riskless -each investor holds the same proportion

  Rudolf corps stock price is 20 per share and its expected

rudolf corp.s stock price is 20 per share and its expected year-end dividend is 2 a share d1 2.00. the stocks required

  Stan free company sells debt investments costing 26000 for

stan free company sells debt investments costing 26000 for 28000 plus accrued interest that has been recorded. in

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd