Determine the relative rate of inflation-exchange rate

Assignment Help Financial Management
Reference no: EM131555224

From the base price level of 100 in 1979, Saudi Arabian and U.S. price levels in 2008 stood at 330 and 672, respectively. Assume the 1979 $/riyal exchange rate was $.78/riyal. Suggestion: Using purchasing power parity, adjust the exchange rate to compensate for inflation. That is, determine the relative rate of inflation between the United States and Saudi Arabia and multiply this times $/riyal of .78.

What should the exchange rate be in 2008? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Reference no: EM131555224

Questions Cloud

Percentage of a normal distribution : What percentage of a normal distribution is within 2 standard deviations of the mean? (Select the closest answer.)
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.
Describe how increases in price would affect total revenue : Describe how increases in the price would affect total revenue. Would it make good business sense to be the one producing and selling these products?
Monthly rent for a one-bedroom apartment : The mean monthly rent for a one-bedroom apartment without a doorman in Manhattan is $2,640.00. Assume the standard deviation is $500.00.
Determine the relative rate of inflation-exchange rate : determine the relative rate of inflation. What should the exchange rate be in 2008?
Develop a statement of need that allows the reader to learn : Develop a statement of need that allows the reader to learn more about your selected issue, presents evidence that supports the need for your program.
Determine the probability that their mean height : If someone of your gender is randomly selected what is the probability that the selected person would be shorter than you are?
A component of managing risk : Which of the following is listed in the text as a component of managing risk when assembling a team in business development?

Reviews

Write a Review

Financial Management Questions & Answers

  What must the coupon rate be on the bonds

Volbeat Corporation has bonds on the market with 16 years to maturit. What must the coupon rate be on the bonds?

  Invest only in the market portfolio yet have portfolio beta

How is it possible to invest only in the market portfolio yet have a portfolio beta of 1.5?

  What is the common-size statement value of inventory

A firm has sales of $1,070, net income of $211, net fixed assets of $514, and current assets of $270. The firm has $86 in inventory. What is the common-size statement value of inventory?

  Determining the ex-dividend date

Determining the Ex-Dividend Date. On Tuesday, December 8, Lippincott Power Co.’s board of directors declares a dividend of 75 cents per share payable on Tuesday, January 26, to shareholders of record as of Tuesday, January 12. What is the ex-dividend..

  What is your cost of funds on new loan if you plan to prepay

You purchased your current home with a loan of $400,000 exactly seven years ago. At that time you secured a 6.04% interest, 30-year mortgage. What is your cost of funds on the new loan if you plan to prepay it at the end of year five?

  Cost of common stock equity-growth rate of dividends

Ross Textiles wishes to measure its cost of common stock equity. The firms stock is currently selling for $57.50. The firm expects to pay a $3.40 dividend at the end of the year (2016). Determine the growth rate of dividends from 2011 to 2015. Determ..

  What are the major categories of depository institution

What are the major categories of depository institution assets and their approximate percentage contribution to total resources? What are the major categories of depository institution liabilities? What are the fundamental differences between them?

  Fully hedge the interest rate risk on the bonds

The asset manager wants to fully hedge the interest rate risk on the bonds by using bond futures and to hedge the equity risk by using index futures.

  Net income-total asset turnover-equity multiplier

You are considering investing in Dakota’s Security Services. You have been able to locate the following information on the firm: Total assets are $32.5 million, accounts receivable are $4.45 million, ACP is 25 days, net income is $4.00 million, and d..

  Compute the price of the bonds based on semiannual analysis

You are called in as a financial analyst to appraise the bonds of Olsen’s Clothing Stores. The $1,000 par value bonds have a quoted annual interest rate of 10 percent, which is paid semiannually. The yield to maturity on the bonds 10 percent annual i..

  What is the discount rate if the interest rate

Top hedge fund manager Diana Sauros believes that a stock with the same market risk as the S&P 500 will sell at year-end at a price of $60. The stock will pay a dividend at year-end of $2.00. Assume that risk-free Treasury securities currently offer ..

  Weighted average implied by the two outstanding debt issues

Filer Manufacturing has 7.4 million shares of common stock outstanding. The current share price is $44, and the book value per share is $5. Filer Manufacturing also has two bond issues outstanding. Suppose the company’s stock has a beta of 1.3. The r..

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