### Making decision on currency choice

Assignment Help International Economics
##### Reference no: EM1375679

Assume that the interest rate in Irish banks is 5 percent for a one year CD. In the United States, the rate is 2 percent for a one year CD. If you left your winnings in Ireland, how many Euros would you have in a year? If you had taken your winnings back to the USA, how many dollars would you have?
Also, when you cashed in your CD in Ireland a year from now, the exchange rate had changed from US\$1 to 1.25 Euro, to US\$1 to 1.30 Euro. How much would your Irish bank account be worth in US\$ at that point? Would I do better by leaving my winnings in Ireland or bringing them home to the USA?

### Previous Q& A

#### Education and achievement levels in america

America spends more on every student in public education than any other developed country and yet performs at bottom of every international student achievement test.

#### Calculation of us trade surplus and deficit

Determine the top 5-exports and imports from Japan and what is the computation of last month's United States trade surplus, deficit, or balance with Japan?

#### Question related to international trade

Choose a United States multinational firm. In terms of currency denomination, discuss how the company values its revenues and costs.

#### Impact of per unit tax on the firm output

The manager of a paper mill is making for her most important test yet. On Tuesday morning, she must testify before a senate committee to justify company's high value.

#### Determine textbook publishers strategy

Textbook publishers have traditionally manufactured both United States and international editions of most leading textbooks. The United States version typically sells at a higher value than international edition.

#### What is the expected return and variance of portfolio

Estimate the Optimal Portfolio assuming that no short sales are allowed and no more than 20% should be invested in a single stock. What is the expected return and variance of this portfolio? AF 426: Financial Modeling - Portfolio Models

#### Real exchange rate and the nominal exchange rate

Differentiate the real exchange rate and the nominal exchange rate and describe two reasons why purchasing power parity does not hold for all goods and services.

#### Trade sanctions - suitable foreign policy weapon

When international hostilities increase, the United States government will sometime use trade sanctions instead of military action.

#### Determine documented mistakes made in the past in marketing

Determine some documented mistakes made in the past in marketing existing North American items to international markets?

#### Find equilibrium income and interest rate

Think that the following model of a small open economy, and Where X = exports, M = imports, e = the real exchange rate=50, Yf = foreign income = 2000.

### Similar Q& A

#### British demand for french products

Assume there is a decrease in British (United Kingdom) demand for French products like cheese, wine, perfume etc., with all else remaining unchanged we expect

#### Comparative advantage theory

Describe unequivocally why the foundation of trade has nothing to do with absolute advantage and only law of comparative advantage is relevant.

#### Focus in the economic ideas

How you consider macroeconomics applies to Walmart and determine what would it contribute to your understanding of this organization's prospects?

#### Multiple choice questions on forward premium

Doug Wyatt is a currency trader for Global Currency Exchange Corporation Wyatt has compiled the following data concerning the U.S. dollar or Australian dollar exchange rate.

#### Concept of return versus risk

In two paragraphs, explain the idea of "return versus risk" and describe how you would use it in selecting a new investment portfolio. Describe how and why you used this idea when you chose your original two stocks.

#### Theory of purchasing power parity

Assume the dollar-pound rate equals \$.5 per pound. According to purchasing power parity theory, determine the dollar's exchange rate under each of the following scenarios?

#### Approach to earn higher profits

Argyle is a huge, vertically integrated company that produces sweaters from a rare type of wool manufactured on its sheep farms. Argyle has adopted a approach of selling wool to firms that compete against it in the market for sweaters.

#### Determining comparative advantage

Assume that each United States worker can produce eight units of food or two units of clothing daily.

#### Question about market structures

Suppose if airline industry was operating under other market structures, how would equilibrium price and quantity differ? Would it be higher, lower, or same?

#### International business activities

Research the international business activities controlled in one specific emerging market through a well known multinational firm or a multinational organization you know well.

#### Absolute or comparative advantage in product

Does either country have absolute or comparative advantage in any item? Give support for your answer through computing the "resource costs" or opportunity costs for both products in both countries.

#### Tariff effect on terms of trade

Assume that one nation subsidizes is exports and other country imposes a countervailing tariff that offsets effects, so that in the end relative prices in the second country are unchanged.

#### 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!