What is the annual rate of interest on six month deposits

Assignment Help Financial Management
Reference no: EM131328333

Assume that Interest Rate Parity holds. The spot rate for the Euro is $1.20. The six month forward rate for the Euro is $1.23 and the one year forward rate is $1.25. The annual rate of interest in the United States on six month deposits is 9.1%. What is the annual rate of interest on six month deposits in Germany? Also, please do not approximate.

Reference no: EM131328333

Questions Cloud

Development of the u.s. healthcare system : The governing board of Middleville hired a consulting company to evaluate its strategic performance, specifically in the areas of Human Resources, Information Technology, Financing, and Marketing. As part of the consultant's evaluation, several le..
Sensitivity to ocf to changes in the variable cost figure : We are evaluating a project that costs $848,000, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Calculate the base cash flow and NPV? What is the Sensitivity to NPV to..
The net present value of this replacement project : The Net Present Value (NPV) of this replacement project is: IBM stock currently sells for 49 dollars per share. Over 12 months the price will either go up by 11.5 percent or down by -7.0 percent. The risk-free rate of interest is 4.5 percent continuo..
Estimate variable and fixed cost for publicly traded company : Distinguish between the substance and form of financial statements. Estimate variable and fixed costs for a publicly traded company.
What is the annual rate of interest on six month deposits : Assume that Interest Rate Parity holds. The spot rate for the Euro is $1.20. The six month forward rate for the Euro is $1.23 and the one year forward rate is $1.25. The annual rate of interest in the United States on six month deposits is 9.1%. What..
What net proceeds will rpc receive from the offering : Assume that RPC's stock price closes at $72.75 per share the day before the seasoned offering is launched. What net proceeds will RPC receive from this offering?
What is the financial break-even point for the project : L.J.’s Toys Inc. just purchased a $365,000 machine to produce toy cars. The machine will be fully depreciated by the straight-line method over its five-year economic life. Each toy sells for $25. The variable cost per toy is $11, and the firm incurs ..
How much will you have as down payment after five years : Suppose you save money for a down payment to buy a home in five years by depositing $6000 that pays 6.5% compounded monthly. How much will you have as a down payment after five years?
What will happen to recs adr price : Suppose REC's stock price rises from €30.00 to €33.00 per share. If the exchange rate does not change, what will happen to REC's ADR price?

Reviews

Write a Review

 

Financial Management Questions & Answers

  Construct opportunity set geometrically and algebraically

Construct your opportunity set both geometrically and algebraically. - Explain why you have drawn your indifference curves as you have drawn them.

  Compute present value of net non-recurring investment

Sancore Inc. decided to invest in a project costing $35,000. It is assumed that all of $8,000 working capital will be recovered at the end of the project, which is four years. The opportunity cost of capital is 10%. Compute the present value of net n..

  What is the rate of return of the oppurtunity

You have an investment oppurtunity that requires an initial investment of $2,600 today and will pay $5,000 in one year. What is the Rate of return of the oppurtunity?

  The current yield on santoss outstanding bonds

Santos energy has 9.5% annual coupon bonds outstanding with 15 years left until maturity. The bonds have a face value (FV) of $1,000 and their current market price (PV) is $1,111.76. what is the YTM on Santos’s bonds? What is the current yield on San..

  Book value of equity and total liabilities

The Here Today Corporation has applied to your bank for a loan. You have their financial statements and the Z-score model of: Z = 6.56*(Net Working Capital/Total Assets) + 3.26*(Accumulated Retained Earnings/Total Assets) + 1.05*(EBIT/Total Assets) +..

  Reasons are good motives for mergers

The following reasons are good motives for mergers except: A. Economies of scale B. Increased purchasing power C. Increased value for acquiring company’s shareholders D. Unused tax shields

  Expected return and portfolio beta

We Do Bankruptcies is a law firm that specializes in providing advice to firms in financial distress. It prospers in recessions when other firms are struggling. Consequently, its beta is negative, if the interest rate on Treasury bills is 6% and the ..

  Debt-to-total-assets ratios and interest rates on debt

Firm AB and Firm YZ are identical except for their debt-to-total-assets ratios (D/TAs) and interest rates on debt. Each has $200,000 in assets, $40,000 EBIT, and a 40 percent marginal tax rate. Firm AB has a D/TA ratio of 40 percent and pays 7.5 perc..

  Capital structure consists solely of debt and common equity

WACC and Percentage of Debt Financing Hook Industries' capital structure consists solely of debt and common equity. It can issue debt at rd = 8%, and its common stock currently pays a $4.00 dividend per share (D0 = $4.00). T

  What is the role of title search in making a home purchase

Describe in detail the advantages and disadvantages of renting versus owning a home. What is the role of the title search in making a home purchase?

  What is the degree of operating leverage of modern artifacts

Modern Artifacts can produce keepsakes that will be sold for $120 each. Nondepreciation fixed costs are $1,600 per year, and variable costs are $100 per unit. The initial investment of $4,800 will be depreciated straight-line over its useful life of ..

  What is the present value of the bond

A bond with a 9% coupon rate pays interest semi­annually. Par value is $1,000. The bond has 4 years to maturity. The investor's required rate of return is 12%. What is the present value of the bond? can you not do a chart and actually show how to do ..

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