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Forward Premium (discount and Interest Rates DifferentialYen Pound S/peseta1-Month Forward 5.4(5.7) -1.9(-1.9) 1.2(1.2)3-Months Froward 4.8(5.3) -1.9(-1.8) 1.2(1.2)1-year Forward 4.5(5) -1.8(-1.6) 1.6(1.5)The first number is U.S. interest rate -Foreign interest rate. For example for 1-year forward Yen of 4.5%, it is the U.S 1-year rate less Japanese 1-year rate. The number in the parenthesis is 5 for 1-year forward yen. This number is the forward premium in yen as it is positive.Question: Suppose you can borrow $10 million or its yen equivalent, what actions would you take in 1-year yen forward market in order to make arbitrage profit? How much arbitrage profit you are likely to make?Forward Premium (discount and Interest Rates DifferentialYen Pound S/peseta1-Month Forward 5.4(5.7) -1.9(-1.9) 1.2(1.2)3-Months Froward 4.8(5.3) -1.9(-1.8) 1.2(1.2)1-year Forward 4.5(5) -1.8(-1.6) 1.6(1.5)The first number is U.S. interest rate -Foreign interest rate. For example for 1-year forward Yen of 4.5%, it is the U.S 1-year rate less Japanese 1-year rate. The number in the parenthesis is 5 for 1-year forward yen. This number is the forward premium in yen as it is positive.Question: Suppose you can borrow $10 million or its yen equivalent, what actions would you take in 1-year yen forward market in order to make arbitrage profit? How much arbitrage profit you are likely to make?
your firm is considering a new investment proposal and would like to calculate its weighted average cost of capital. to
You should recommend that the project be rejected because, although its NPV is positive, it has an IRR that is less than the WACC.
Ladders Inc. has a net profit margin of 5.5% on sales of $50.6 million It has book value of equity of $39.5 million and total book liabilities of $31.9 million. What is Ladders ROE and ROA?
In behavioral finance studies have revealed 4 basic biases that affect rational decision making. Identify and explain those biases.
Pierre thinks you can rank these projects from best to worst by simply inspecting the cash flows (and not calculating anything). Try to do so.
What is the company's expected growth rate? Round your answer to two decimal places at the end of the calculations.
Based on the cost-cutting measures you identified, state how much money every year you anticipate saving if you implemented every measure.
On August 1st 2009 USD/SAR exchange rate was SAR9.20 per USD. On August 1st 2010 (1 year later), USD/SAR rate moved up to USD/SAR9.80.
Given this discussion, the CFO asks you to prepare a scenario analysis to evaluate the importance of the tractor's life on NPV.
How does the Occupational Safety and Health Administration (OSHA) encourage organizations to adopt ergonomic job design?
Dressler Engine Tuning just decided to save money each year for the next 4 years to help fund a new building. If it earns 5.5 percent on its savings, how much will the firm have saved at the end of year 4?
You require a return of 10 percent and use a light fixture 500 hours per year. What is the break-even cost per kilowatt-hour?
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