What must be one-year forward exchange rate

Assignment Help Financial Management

Reference no: EM131329429

If the interest rate in the United Kingdom is 10 percent, the interest rate in the United States is 12 percent, the spot exchange rate is $1.6821/£1, and interest rate parity holds, what must be the one-year forward exchange rate? (Do not round intermediate calculations. Round your answer to 4 decimal places. (e.g., 32.1616))

Reference no: EM131329429

Questions Cloud

How will a share repurchase affect the value of the firm : Megaware Incorporated is a technology firm that was founded eight years ago by John Thompson and Jill Dillman. Megaware manufactures various hardware and software components. Its products are used in personal computers and other peripheral devices. H..

Stock dividends-calculate the ex-dividend price : Stock dividends: The market value balance sheet for Outland Manufacturing is shown in the table below. Outland has declared a 20 percent stock dividend. The stock goes ex-dividend tomorrow. (Chronology for a stock dividend is similar to that for a ca..

Use excess cash flow to pay a special one-time dividend : Megaware Incorporated is a technology firm that was founded eight years ago by John Thompson and Jill Dillman. Megaware manufactures various hardware and software components. Its products are used in personal computers and other peripheral devices. J..

Use the excess cash flow to pay off debt : Megaware Incorporated is a technology firm that was founded eight years ago by John Thompson and Jill Dillman. Megaware manufactures various hardware and software components. Its products are used in personal computers and other peripheral devices. J..

What must be one-year forward exchange rate : If the interest rate in the United Kingdom is 10 percent, the interest rate in the United States is 12 percent, the spot exchange rate is $1.6821/£1, and interest rate parity holds, what must be the one-year forward exchange rate?

Explain what capital budgeting is and the methods : Explain what capital budgeting is and the methods used to evaluate projects. Discuss the similarities between a firm's capital budgeting decisions and an individual's investment decisions. Discuss the difference between independent and mutually exclu..

What is her portfolio beta : An individual has $15,000 invested in a stock with a beta of 0.4 and another $35,000 invested in a stock with a beta of 2.0. If these are the only two investments in her portfolio, what is her portfolio's beta?

Using the capital asset pricing model : Using the capital asset pricing model (CAPM): A stock has a beta of 1.65, and the projected return on the market is 12.25 percent, with a risk-free rate of 4.75 percent. Calculate the projected return on this stock.

What is its value if the interest is paid annually : Enterprise, Inc. bonds have an annual coupon rate of 11 percent. The interest is paid semiannually and the bonds mature in 9 years. Their par value is $1,000. If the market's required yield to maturity on a comparable-risk bond is 14 percent, what is..

User Account

All Pages