Reference no: EM131827055
Questions: 1. Income Effects on Exchange Rates Assume that the U.S. income level rises at a much higher rate than does the Canadian income level. Other things being equal, how should this affect the
(a) U.S. demand for Canadian dollars,
(b) supply of Canadian dollars for sale, and
(c) equilibrium value of the Canadian dollar?
2. Economic Impact on Capital Flows How do you think the weaker U.S. economic conditions could affect capital flows? If capital flows are affected, how would this influence the value of the dollar (holding other factors constant)?
3. Speculating with Currency Options When should a speculator purchase a call option on Australian dollars? When should a speculator purchase a put option on Australian dollars?
4. Estimating Profits from Currency Futures and Options One year ago, you sold a put option on 100,000 euros with an expiration date of 1 year. You received a premium on the put option of $.04 per unit. The exercise price was $1.22. Assume that 1 year ago, the spot rate of the euro was $1.20, the 1-year forward rate exhibited a discount of 2 percent, and the 1-year futures price was the same as the 1-year forward rate. From 1 year ago to today, the euro depreciated against the dollar by 4 percent. Today the put option will be exercised (if it is feasible for the buyer to do so).
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Record the transactions of Iverson Company
: On October 5, Iverson Company buys merchandise on account from Lasse Company. The selling price of the goods is $5,000, and the cost to Lasse Company is $3,000.
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Make the journal entries to record the transactions
: Prepare the journal entries to record these transactions on Kimble Company's books using a periodic inventory system.
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Discuss about the quality of the company earnings
: Cabo Corporation reported net income of $346,000, cash of $67,800, and net cash provided by operating activities of $221,200.
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Calculate the given values and explain meaning
: Garten Corporation reported net sales $800,000, cost of goods sold $520,000, operating expenses $210,000, and net income $68,000.
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Determine economic impact on capital flows
: Economic Impact on Capital Flows How do you think the weaker U.S. economic conditions could affect capital flows?
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Effect of unfavorable changes in value of foreign currencies
: Do you think US companies should be allowed to use foreign currency derivatives to hedge against the effect of unfavorable changes in the value of foreign.
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What is meant by the term harmonize
: Some accountants are seeking to harmonize international accounting standards. What is meant by the term harmonize? How might harmonization result in better.
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What should good accounting system provide and why
: There are accounting packages designed for different types of industries. From your own experience, working with various accounting software.
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Describe the use of contribution margin analysis
: Describe the use of contribution margin analysis in product costing. Use cost-volume-profit analysis to evaluate the financial consequences of alternative.
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