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

  Debt to assets and debt to equity ratios

Calculate xyz corps net profit margin, debt to assets and debt to equity ratios for the following info: Sales/total assets ratio = 1.8 ROA = 3.5% ROE = 6.0%

  Now focus on the management variances

Now focus on the management variances. Note that the case does not contain data related to supplies costs or fixed costs, so the management variances are, in reality, staffing variances. Break down the staffing variances into rate and efficiency vari..

  In which of these stocks should you invest

You are considering three stocks for investment purposes. The required return on the market portfolio is 14%, and the riskless return is 9%. Based on the information given, in which (if any) of these stocks should you invest?

  What is the price of the bond which pays annual interest

A 5-year bond which pays 8 percent interest semiannually sells at par ($1,000). Another 5-year bond of equal risk pays 8 percent interest annually. Both bonds are non-callable and have a face value of $1,000. What is the price of the bond which pays ..

  Three methods for developing probability estimates

Three methods for developing probability estimates (not decision models) were discussedin "Capital Budgeting and Long-Term Financing Decisions, 4th Edition", what are they and which of these is most common in practice?

  A coin that is balanced should come up heads half the time

A coin that is balanced should come up heads half the time in the long run. A coin is tossed 4040 times and gives 2085 heads.

  EAR is the same regardless of the length of the investment

You can earn $32 interest on a $1,000 deposit for 8 months. If the EAR is the same regardless of the length of the investment how much interest will you earn on a $1,000 deposit for:

  What will be the effect on retained earnings if a firm

What will be the effect on retained earnings if a firm with 5,600 shares outstanding earns $10 per share and has a 30% plowback ratio? It will increase by: A firm sells its $1,000,000 receivables to a factor for $964,000. Average collection period is..

  Prepare cash budget

Prepare cash budget for the months of January, February and March. The difference between receipts and payments, net cash flow, for each month is: 5,000; (2,900); 7,200. Beginning and desired cash balance is $2,000.

  The dividend is expected to grow at some constant rate

Gay Manufacturing is expected to pay a dividend of $1.50 per share at the end of the year (D1 = $1.50). The stock sells for $32 per share, and its required rate of return is 10.5%. The dividend is expected to grow at some constant rate, g, forever. W..

  Effectively eliminating minority participation

Firm ABC just elected three members to their board of directors. In doing so, they elected them one at a time, effectively eliminating minority participation. Thus, they did _______ voting.

  Determine the amount required to settle debt at end of years

A person owes $1300 at the end of 5 years and $6550 at the end of 10 years. Due to changes in their financial situation, the person was allowed to pay $900 at the end of 3 year(s) and a final payment at the end of 13 years using 10.5% compounded annu..

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