Assume a U. S.-based MNC is borrowing Romanian leu (ROL) at an interest rate of 8% for one year. Also assume that the spot rate of the leu is $.00012 and the one-year forward rate of the leu is $.00010. The expected spot rate of the leu one-year from now is $.00011.What is the effective financing rate for the MNC assuming it borrows leu on an uncovered basis?

a) 10%
b) –10%
c) –1%
d) 1%
e)None of the above

c. -1

Explanation:

Base on the scenario been described in the question, we can use the following method to solve the given problem

Solution:

Depreciation of leu: .00010/.00011 – 1

Depreciation of leu = -9.09%

Effective financing rate: (1.08) x [1 + (-9.09%)] – 1 = -1.82%.28.

answer: a. the kind of population living in your neighbourhood.

the census explorer data tool by the us census bureau allows the user to zoom in on any neighbourhood within the united states and find the kind of people residing in that by race and age.  

the tool needs to needs to be used twice – once in order to find what type of people reside in a neighbourhood, and then to see the age groups of the people in the same neighbourhood.

answer makes less frequent trips to the bank and firms make less frequent price changes;