What is the new exchange rate

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Reference no: EM131845273

1. Suppose a US firm issues a bond denominated in a foreign currency at a 2% lower interest rate than they could issue in the US. Over time, the foreign currency depreciates 2% against the US dollar. The US firm dollar-denominated equivalent cost of funding for this foreign issue is:

Approximately on savings

About 2% more than issuing in the US

About a 2% savings relative to issuing in the US

About a 4%saving relative to issuing in the US

2. The exchange rate at the start of the year was $1.2500/E. Now the exchange rate is $1.3750/E. the percentage change in the value of the US dollar over this time period has been.?

-9.09%

+11.11%

+10%

-10%

3. If the spot rate is $1.265/E Appreciate and then the dollar Appreciate 6%, what is the new exchange rate?

$1.193/E

$1.341/E

$1.337/E

$1.189/E

Reference no: EM131845273

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