Reference no: EM131391697
International Finance
1. Assume annualized interest rates in the U.S. and Switzerland are 10% and 4%, respectively, and the Swiss franc can be exchanged for $0.3807. Assume covered interest rate parity holds. What is the 90day forward rate for the Swiss franc ($/Swiss franc)?
2. If annualized interest rates in the U.S. and Switzerland are 10% and 4%, respectively, and the 90day forward rate for the Swiss franc is $.3864, at what current spot rate will covered interest rate parity hold?
3. Annualized interest rates in the U.S. and France on January 1, 1991 are 9% and 13%, respectively. The spot value of the franc is 0.1109 per dollar.
4. Suppose the Swiss franc is worth $0.40 at the beginning of the year. During the year, U.S. inflation is 5% and Swiss inflation is 3%.
a) Does economic theory predict an appreciation or a depreciation of the Swiss franc over the year? Why? By how much approximately? Suppose the Swiss franc is worth $0.44 at the end of the year.
b) By how much did the nominal value of the Swiss franc change over the year? Does your answer confirm or disprove the prediction of economic theory?
c) Does your answer inb) imply a change in the competitiveness of Switzerland relative to the United States? Why?
d) Compute the real value of the Swiss franc relative to the U.S. dollar at the end of the year.
e) The real exchange rate at the beginning of the year equals the nominal spot rate. Compute the change in the real value of the Swiss franc over the year.
f) Verify that the real percentage change in the exchange rate (answer d) equals the difference between the nominal percentage change in the exchange rate (answer b) and the inflation rate differential between the two countries.
5.Suppose the Swiss franc is worth $0.40 at the beginning of the year. During the year, U.S. inflation is 5% and Swiss inflation is 3%.
a) Does economic theory predict an appreciation or a depreciation of the Swiss franc over the year? Why? By how much approximately? Suppose the Swiss franc is worth $0.44 at the end of the year.
b) By how much did the nominal value of the Swiss franc change over the year? Does your answer confirm or disprove the prediction of economic theory?
c) Does your answer in b) imply a change in the competitiveness of Switzerland relative to the United States? Why?
d) Compute the real value of the Swiss franc relative to the U.S. dollar at the end of the year.
e) The real exchange rate at the beginning of the year equals the nominal spot rate. Compute the change in the real value of the Swiss franc over the year.
f) Verify that the real percentage change in the exchange rate (answer d) equals the difference between the nominal percentage change in the exchange rate (answer b) and the inflation rate differential between the two countries.
Document business process flows
: What are some of the advantages in using BPMN to document business process flows instead of other methods such as standard flowcharts?
|
Central idea of business process design
: What is the central idea of business process design? Use examples to support your answer. Your response should be at least 200 words in length. Please site work
|
Review your returned marketing plan
: MKT 308: Review your returned Marketing Plan Template from the assignment. As you work on your plan throughout the class, you may go back and adjust previously submitted sections to include new information learned or to incorporate instructor feed..
|
Apple orchard assisted living
: As the manager in charge of several important projects at Apple Orchard Assisted Living, Janelle Wilkins has confronted some behavior and leadership problems with the project team leader, Emilio Jones, whom she assigned to develop a new staffing p..
|
What current spot rate will covere interest rate parity hold
: If annualized interest rates in the U.S. and Switzerland are 10% and 4%, respectively, and the 90day forward rate for the Swiss franc is $.3864, at what current spot rate will covered interest rate parity hold?
|
Classic in the study of human behavior
: Maslow's Theory of Human Motivation is considered a classic in the study of Human Behavior. However, this article was written in 1943!
|
Find the angular acceleration of the disk
: A 5-kg uniform disk is attached to the 3-kg uniform rod BC by means of a frictionless pin AB. An elastic cord is wound around the edge of the disk and is attached to a ring at E.
|
What percent of the males in the class consider themselves
: What percent of the class is male?- What percent of the class considers themselves to be "Conservative"?- What percent of the males in the class consider themselves to be "Conservative"?
|
Examples of external sources
: What are some examples of external sources that you use in conducting business research on both countries? Name at least four factors that will heavily influence your recommendation to Mr. Tobias. Explain why these factors are important. Which count..
|