Business, 27.03.2020 01:50 yasiroarafat12

Suppose a U. S. firm has an asset in Britain whose local currency price is random. For simplicity, suppose there are only three states of the world and each state is equally likely to occur. The future local currency price of this British asset (P) as well as the future exchange rate (S) will be determined, depending on the realized state of the world. State Probability P S S × P* 1 1/3 £ 1,000 $ 1.40 /£ $ 1,400 2 1/3 £ 933 $ 1.50 /£ $ 1,400 3 1/3 £ 875 $ 1.60 /£ $ 1,400 Which of the following statements is most correct? Multiple Choice The firm faces no exchange rate risk since the local currency price of the asset and the exchange rate are negatively correlated. The firm faces substantial exchange rate risk since the local currency price of the asset and the exchange rate are positively correlated. The firm's exchange rate exposure can be completely hedged with derivatives written on the British pound.

Answers: 3

Show answers

Another question on Business

Business, 22.06.2019 04:50

Neveready flashlights inc. needs $317,000 to take a cash discount of 3/15, net 70. a banker will loan the money for 55 days at an interest cost of $13,200. a. what is the effective rate on the bank loan? (use a 360-day year. do not round intermediate calculations. input your answer as a percent rounded to 2 decimal places.) b. how much would it cost (in percentage terms) if the firm did not take the cash discount but paid the bill in 70 days instead of 15 days? (use a 360-day year. do not round intermediate calculations. input your answer as a percent rounded to 2 decimal places.) c. should the firm borrow the money to take the discount? no yes d. if the banker requires a 20 percent compensating balance, how much must the firm borrow to end up with the $317,000? e-1. what would be the effective interest rate in part d if the interest charge for 55 days were $7,200?

Answers: 3

Answer

Business, 22.06.2019 16:40

Based on what you learned about time management which of these statements are true

Answers: 1

Answer

Business, 22.06.2019 19:30

Quick calculate the roi dollar amount and percentage for these example investments. a. you invest $50 in a government bond that says you can redeem it a year later for $55. use the instructions in lesson 3 to calculate the roi dollar amount and percentage. (3.0 points) tip: subtract the initial investment from the total return to get the roi dollar amount. then divide the roi dollar amount by the initial investment, and multiply that number by 100 to get the percentage. b. you invest $200 in stocks and sell them one year later for $230. use the instructions in lesson 3 to calculate the roi dollar amount and percentage. (3.0 points) tip: subtract the initial investment from the total return to get the roi dollar amount. then divide the roi dollar amount by the initial investment, and multiply that number by 100 to get the percentage.

Answers: 2

Answer

Business, 22.06.2019 20:20

John has served as the chief operating officer (coo) for business graphics, inc., a publicly owned firm, the past 5 years. which of the following statements about john is correct? both john and the ceo of business graphics must certify to the sec that the firm's financial statements are accurate. as the coo, john will be ranked higher than the ceo but still below the cfo. in john's postition as the coo, it is highly unlikely that he would also be the chairperson of the board of directors. as the coo, john would typically be involved with accounting, finance, and asset purchase decisions.

Answers: 2

Answer

You know the right answer?

Suppose a U. S. firm has an asset in Britain whose local currency price is random. For simplicity, s...

Questions