ndian rupee forward contracts. The Indian rupee (INR) is currently trading at INR 50 = US$1. With 90-day Indian-rupee and U.S. dollar treasury bills currently yielding 10 percent and 2 percent per annum, respectively, what would be the forward INR price of US$1? What assumptions are you making with respect to the credit rating of either government securities? Please explain how the INR to USD is converted with the solution being: To convert INR to USD=150.99502488 INR= 0.0196097561 USD Answer - INR 0.01970.
Q: 15. A company is considering two mutually exclusive projects. Both require an initial cash outlay of...
A: Question Details and inputs: Initial Investment = 20,000 each Required Return = 10% Tax Rate = 35% S...
Q: Issue is affordable housing- 1. What is the housing issue, what is the community, and how is the is...
A: In-house finance is when a company gives its consumers a loan so they can buy its products or servic...
Q: Consider the following figures from the balance sheet of Calcutta Merchants Club: Current Assets Rs...
A: Shareholder Equity: It can be described as the residual claim of the owners of the company after al...
Q: Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to...
A:
Q: Turnbull Co. is considering a project that requires an initial investment of $1,708,000. The firm wi...
A: WACC is the weighted average cost of capital . Total capital = $1,708,000 Debt = $750,000 Preferred ...
Q: Jaime purchased a sewing machine. After 8% sales tax, she paid $139.32. What equation can be used to...
A: Sales Price Inclusive of Sales Tax can be calculated as = Sales Price Before Tax + 8% of Sales Price...
Q: Two twins Iqbal & Irfan both will save RM200 at 12% compounded annually. Iqbal deposit RM 200 every ...
A: The formula for the calculation of future value of investment is as follows: Future value=Payment×1+...
Q: How much is accumulated in each of the savings plans over two years? a. Deposit €1100 today at 15 pe...
A: Given: Particulars 15% 12% Deposit € 1,100 € 700 Years 2 2
Q: Eli wants each of his children to receive $1000000as an inheritance if he dies.this is a part of? a)...
A: Estate planning is that area of planning where the assets of an individual are passed on to other pe...
Q: o investments, one paying 3% annual interest and the other 4%. The total annual income from the inve...
A: The amount of interest in each depends on the interest bearing instrument weight in the that.
Q: Gina has an opportunity to save $260 per month at an APR of 6.35% in a 401K plan through work. She p...
A: Investment means engaging your funds to generate income for the future. There are various purposes f...
Q: Sewing World has an all-equity cost of capital of 11.72 percent, a levered cost of equity of 12.94 p...
A: A firm raises finance from various sources typically debt and Equity. The ratio of debt finance to E...
Q: Find i (the rate period) and n (the number of periods) for the following annuity Monthly deposits of...
A:
Q: Your firm is considering financing a project that costs $1,000,000 by raising $500,000 in equity and...
A: NPV of unlevered project = - $50000 Tax rate = 24% Debt = Equity = $500000
Q: The British government has a bond outstanding that pays £100 in interest each year for 18 years. Ass...
A: Present Value can be calculated using PV function in excel PV (rate, nper, pmt, [Fv], [type]) Rat...
Q: A firm has net income of $21,350, depreciation of $2,780, interest of $640, and taxes of $10,990. Th...
A: We can calculate the value of the firm by using the EBITDA and EBITDA Multiple. We will first calcul...
Q: Find the future value of each annuity due. Then determine how much of this value is from contributio...
A: When an equal amount of payment is made in equal time interval for a fixed number of times, it is ca...
Q: depreciated on a straight-line basis. The before taxes cash flows expected to be generated by the pr...
A: The process through which a company evaluates possible big projects or investments is known as capit...
Q: A company is considering a project. The project requires new machinery at a cost of £140,000 which i...
A: The accounting rate of return is a capital budgeting ratio that is used to find the profitability of...
Q: You have $300,000 saved for retirement. Your account earns 5% interest. How much will you be able to...
A: The present value of an annuity: The constant amount that can be withdrawn each month for 20 years c...
Q: do assignments using excel and manually if possibly A student plans to open a business with the cour...
A: Loan amount (PV) = $1740.11 Interest rate (r) = 6% Period (n) = 5 Years
Q: 15–3. (Calculating capital structure weights) (Related to Checkpoint 15.1 on page 502) Winchell Inve...
A: A financial ratio that measures a company's leverage is referred to as a "debt ratio." The debt rati...
Q: Two bonds are selling at par value and each has 17 years to maturity. The first bond has a coupon ra...
A: Duration refers to the price sensitivity of a bond, or a portfolio of bonds, to a change in interest...
Q: A company hires an employee with a family of 3 for a salary of $160,000 over 3 other candidates. If ...
A: Recruiting costs are the costs that are incurred by the company in hiring and training new employees...
Q: A packaging employee making $14 per hour can pack 400 bags of chips during that hour. The direct mat...
A: Hourly cost of labor = $14 Number of bags per hour = 400 bags Labor cost per bag = 14/400 = $ 0.035 ...
Q: Alto and Tenor have 17,400 shares of stock outstanding at a market price of $27 per share. The firm ...
A: Market value of equity = 17,400 x 27 = 469,800 Value of debt = 140,000 Total capital = 469,800 + 140...
Q: 15–4. (Adjusting a firm's capital structure) Curley’s Fried Chicken Kitchen operates two southern-co...
A: We know that Debt Ratio is the ratio of Total debt to total asset. here total debt includes short te...
Q: A 1 year 2% coupon bond has a year to maturity of 9%, while a 1 year 12% coupon bond has a year to m...
A: A bond is a debt instrument that promises to pay back the principal along with some interest.
Q: If a firm has an EV of $820 million and EBITDA of $187 million, what is its EV ratio?
A: Given: EV = $820 million EBITDA = $187 million
Q: 3BB company had cash and marketable securities worth $400,134 accounts ables worth $2,490,357, inven...
A: Since you have posted a multiple question so we will be solving the first question for you only. if ...
Q: The payments are made monthly and its compounding periods is quarterly." What kind of annuity is thi...
A: payments are made monthly and its compounding periods is quarterly Payment period = monthly Compou...
Q: Goliath Corp. just paid an annual dividend of $5.40 per share. The dividend growth rate is 5.5 perce...
A: Annual dividend (D0) = $5.40 Growth rate (g) = 5.5% Tax rate = 21% Stock price (P0) = $58.50
Q: What is the purpose and workings of the Monetary policy transmission mechanism (MPTM)? What are the ...
A: Monetary transmission technique or the mechanism is referred to as the process through which the pri...
Q: Bailey, Inc., is considering buying a new gang punch that would allow them to produce circuit boards...
A: MARR is the minimum rate that a company is willing to earn from a project. It is also known as the b...
Q: Falafel Hut has sales of $512,630. The cost of goods sold is equal to 60 percent of sales. The begin...
A: The accounts receivable are the current assets of the company. The increase in the credit sales or t...
Q: A group of farmers in Inverness is considering building an irrigation system from a water supply in ...
A: Internal rate of return (IRR) is the rate of discount which makes the net present value of the proje...
Q: Christina Company (a U.S.-based company) has a subsidiary in Canada that began operations at the sta...
A: Answer - Computation of Translation Adjustment - Particular CAD Exchange Rate USD Net Ass...
Q: Topic is Interests If A(t) = 100(1.1)t Find: a. i5 b. i10 Show complete solution with explanatio
A:
Q: ABC bank pays interest at the rate of 2% compounded quarterly. How much will Ken have in the bank at...
A: Interest rate = 2% Monthly interest rate (r) = [{1+(0.02/4)}4]1/12-1 ...
Q: Company sells $5,000,000 of five-year, 10% bonds at the start of the year. The bonds have an effecti...
A: Cash interest refers to the amount of interest that is paid to creditors.To put it another way, it r...
Q: a purchaser makes a 20% down payment on a new home and obtains a loan for the balance. The lender ch...
A: Discount points = 2 Loan origination fees = 1000 Down payment = 20% Mortgage = 80%
Q: A Corporation believes that it can sell long term-bonds with an 8% coupon rate, although the effecti...
A: Corporate bond kind of debt issued by profit-generating organizations. These bonds are risky, unlike...
Q: en’s Beauty Salon has estimated monthly financing requirements for the next six months as follows: ...
A: The overall cost of borrowing debt money to fund a business arrangement is referred to as the cost o...
Q: what does it mean if the npv and irr are both negative quora, should the company invest in the proje...
A: Capital Budgeting entails long-term planning and monitoring of capital expenditures, as well as a ra...
Q: Pete's Boats has beginning long-term debt of $180 and ending long-term debt of $310. The beginning a...
A: Cash flow to creditors is the total amount of profit paid the debt holders of the company. The cash ...
Q: A certain type of machine loses 10% of its value each year. The machine cost P2,000 originally. Make...
A: Machine cost = P2,000 Depreciation rate = 10%
Q: 1. Simple Interest versus Compound Interest First City Bank pays 7 percent simple interest on its sa...
A: First city bank simple interest rate (i) = 7% Second city bank compound interest (r) = 7% Deposit (D...
Q: Wingler Communications Corporation (WCC) produces airpods that sell for $28.90 per set, and this yea...
A: (Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the questio...
Q: The purchaser of a car paid $10,000 cash and agreed to pay $3000 at the end of 6 months for 10 years...
A: Calculate the future value of the annuities (PMT) that are not paid till the end of 3rd Year. Worki...
Q: If you wish to accumulate $205,000 in 6 years, how much must you deposit today in an account that pa...
A: Future value (FV) = $205,000 Interest rate = 15% Monthly interest rate (r) = 15%/12 = 1.25% Period =...
Indian rupee forward contracts. The Indian rupee (INR) is currently trading at INR 50 = US$1. With 90-day Indian-rupee and U.S. dollar treasury bills currently yielding 10 percent and 2 percent per annum, respectively, what would be the forward INR price of US$1? What assumptions are you making with respect to the credit rating of either government securities?
Please explain how the INR to USD is converted with the solution being:
To convert INR to USD=150.99502488 INR= 0.0196097561 USD
Answer -
INR 0.01970.
The interest rate are very important factor in determining the forward rate and both must go in hand with each other.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Indian rupee forward contracts. The Indian rupee (INR) is currently trading at INR 50 = US$1. With 90-day Indian-rupee and U.S. dollar treasury bills currently yielding 10 percent and 2 percent per annum, respectively, what would be the forward INR price of US$1? What assumptions are you making with respect to the credit rating of either government securities? Please explain the calculation Answer - INR 0.01970.Indian rupee forward contracts. The Indian rupee (INR) is currently trading at INR 50 = US$1. With 90-day Indian-rupee and U.S. dollar treasury bills currently yielding 10 percent and 2 percent per annum, respectively, what would be the forward INR price of US$1? What assumptions are you making with respect to the credit rating of either government securities?The next two questions are based on the following information Consider the following prices in the international money markets: Spot rate: USD1.275/GBP One-year Forward rate: USD1.364/GBP Interest Rate (UK): 2.39% Interest Rate (US): 11.66% Assuming no transaction costs, which of the following statements is true? An arbitrage can be obtained by borrowing in the currency that is expressing the other currency. An arbitrage can be obtained by investing in the currency that is expressing the other currency. An arbitrage can be obtained by borrowing in the currency that is being expressed by the other currency. O d. An arbitrage cannot be obtained by investing in the currency that is being expressed by the other currency. O e. None of the option in this question are correct. O a. O b. O c. What should the forward rate be for the International Fisher Effect to hold? GBP1.4875/USD GBP1.3904/USD USD1.3904/GBP d. USD1.4875/GBP O e. None of the options in this question. a. O b. Oc
- Use the information below to answer the following questions. Currency per U.S. $ 1.2380 1.2353 Australia dollar 6-months forward Japan Yen 6-months forward U.K. Pound 6-months forward 100.3600 100.0200 .6789 .6784 Suppose interest rate parity holds, and the current six month risk-free rate in the United States is 5 percent. Use the approximate interest rate parity equation to answer the following questions. a. What must the six-month risk-free rate be in Australia? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What must the six-month risk-free rate be in Japan? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Australian risk-free rate b. Japanese risk-free rate c. Great Britain risk-free rate c. What must the six-month risk-free rate be in Great Britain? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) % % %You observe the following current rates: Spot exchange rate: $0.01/yen. Annual interest rate on 90-day U.S. dollar–denominated bonds: 4%. Annual interest rate on 90-day yen-denominated bonds: 4%. a. If uncovered interest parity holds, what spot exchange rate do investors expect to exist in 90 days? b. A close U.S. presidential election has just been decided. The candidate whom international investors view as the stronger and more probusiness person won. Because of this, investors expect the exchange rate to be $0.0095/yen in 90 days. What will happen in the foreign exchange market?Today, $1 = 1.82 Euro and $1 = 130 Korean Won. In the 90-day forward market, $1 = 1.84 Euro and $1 = 127 Korean Won. Which of the following statements is most correct when interest rate parity holds? Interest rates on 90-day risk-free U.S. securities are higher than the interest rates on 90-day risk-free Euro securities. Since interest rate parity holds, interest rates should be the same in all three countries. Interest rates on 90-day risk-free U.S. securities are higher than the interest rates on 90-day risk-free Korean securities. Interest rates on 90-day risk-free U.S. securities equal the interest rates on 90-day risk-free Korean securities.
- Assume that interest rate parity holds. In the spot market 1 Japanese yen = $0.00905, while in the 90-day forward market 1 Japanese yen = $0.00913. In Japan, 90-day risk-free securities yield 1%. What is the yield on 90-day risk-free securities in the United States? Do not round intermediate calculations. Round your answer to two decimal places.Suppose that a French firm would like to have its stock available through an American Depository Receipt (ADR). If the firm’s stock is currently selling for €75 and that the exchange rate between the € and the $ is €1.0=$1.0592. What price should we expect for the ADR in US dollars? Suppose that over the next year the dollar reaches parity with the Euro, i.e., $1.00=€1.00 and that the price of the French firm’s stock rises to €100. What would expect the price of the ADR to be?2. Suppose today's exchange rate is $1.23/€. The three-month interest rates on dollars and euros are 6% and 3 % (both anual rates), respectively. The three-month forward rate is $1.25. A foreign exchange advisory service has predicted that the euro will appreciate to $1.27 within three months. Consider 1 million euros. a.. How would you use forward contracts to speculate in the above situation? b. How would you use money market instruments (borrowing and lending) to speculate? C. Which alternatives (forward contracts or money market instruments) would you prefer? Why? d. Can you make profits without risks? If so, explain and calculate how you do that.
- In the spot market, 1 Philippine peso can be exchanged for 2.51 Japanese yen. In the 1-year forward market, 1 Philippine peso can be exchanged for 2.53 Japanese yen. The 1-year, risk-free rate of interest is 5 percent in the Philippines. If interest rate parity holds, what is the yield today on 1-year, risk-free Japanese securities?Suppose the spot price of a euro in dollars is $0.932. The U.S. interest rate for 90 days is 6.875% and the euro rate for 90 days is 4.450%. All interest calculations are done as rate times (#days/360). a. What is the rate for a 90-day forward contract on the euro? b. Suppose the euro forward contract is currently quoted at $0.95. What type of transaction(s) should an arbitrageur conduct to take advantage of the apparent mispricing Only typed answerSuppose the following exchange rate quotations are available: Citibank quotes U.S. dollars per Euro: $1.2223/€Barclays Bank quotes U.S. dollars per pound sterling: $1.8410/£ Dresdner Bank quotes Euros per pound sterling: €1.5100/£ You are a market trader with $1,000,000. Will you be able to make an arbitrage profit using these quotes? If yes, why? What will be the profit? Show your calculations.