impacts of a contractionary monetary policy in both the monetary model and Mundell-Fleming model.

Q: Discuss the differences between using (1) a terminal cap rate and (2) an appreciation rate in…

A: Every property has to be evaluated over the cap rate beforehand it's vended. For the asset being…

Q: How does inflation rate affect exchange rate?

A: Foreign Exchange Rate is the exchange rate at which the currency of one country exchanges with…

Q: Give recommendations on how to reduce exchange rate exposure.

A: Exchange rate risk, often known as foreign exchange (forex) risk, is an inevitable risk of…

Q: Relationship of monetary policy to inflation

A: Inflation: Inflation is defined as a situation in which the general price level of the economy rises…

Q: The relationship between project cash flows, taxes and inflation.

A: Cash flows is the flow of money in or out from the business. There are two types of cash flows which…

Q: How should inflation expectations be included in analysis of capital projects?

A: Inflation expectations should be included in the analysis of capital projects by factoring in the…

Q: Explain how political risk and exchange rate risk increase the uncertainty of international projects…

A: Capital budgeting is the process of evaluating and selecting long-term investments that will benefit…

Q: Define currency appreciation

A: Answer: The meaning of currency appreciation is nothing but an rise of one currency’s value…

Q: Discuss the main features of Capital Asset Pricing Model (CAPM) and comment on the validity of the…

A: The capital asset pricing model is a risk adjusted model which will be helpful in finding the…

Q: Draw and explain the impact of budget deficit on loanable fund market and on the macroeconomic…

A: Investment Savings and investment spending on the physical capital are the categories of the real…

Q: The discount rate is the combination of what two types of discounting?   a. exponential and linear…

A: Discount rates are used for discounting the future cash flows. It helps in determining the time…

Q: In the context of capital budgeting, what is meant by the word “discounting”?

A: The term 'discounting' in the context of capital budgeting refers to the process of determining the…

Q: Differentiate between the Loan and Project Cash Flows?

A: Loan Cash Flows:   It refers to the borrowing of unsecured nature that is used by small businesses…

Q: Explain the concept of cointegration with examples from Finance where cointegration between a set of…

A: Finance is a vast field and involves the study of a financial or monetary system and various…

Q: Define the term Mixed-Dollar Analysis?

A:

Q: Explain how political risk and exchange rate risk increase the uncertainty of international projects…

A: Political risk and exchange rate risk are two important sources of uncertainty that can increase the…

Q: Expansionary monetary policy is aimed at ________ the federal funds rate and ________ the aggregate…

A: The basic purpose of expansionary policy is to raise aggregate demand for meeting the shortfalls…

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…

Q: Conducting monetary policy so that the FF rate = 1.25%, where the FF rate is the nominal federal…

A: The main goal of central banks of any country is to provide price stability to the currency of the…

Q: Which capital budgeting technique defines returns in terms of income instead of cash flows? 4 a) The…

A: Payback Period, IRR and Net Present Value is calculated using annual net cash inflows. And…

Q: system, the three endogenous variables in the IS/LM/BP model are output, interest rates and money…

A: THE Mundell Fleming model is known as IS /LM/BOP MODEL. The equation more relevant for small open…

Q: How can we establish economic equivalence by selecting the base period?

A: Answer: There is economic equivalence between cash flows which have the same economic influence and…

Q: When is a project in Need for an External Interest Rate?

A: When net cash flow that is generated by the project during the project’s life is reinvested, then…

Q: impacts  of inflation on money investment

A: Inflation occurs when prices across a sector or an industry increases, thereby decreasing the…

Q: Under a flexible exchange rate system, the three endogenous variables in the IS/LM/BP model are…

A: THE MUNDELL FLEMING MODEL , AS THE ECONOMY cannot maintain a fix exchange rate three capital women…

Q: The pure time value of money is known as the:   Multiple Choice   liquidity effect.   inflation…

A: The pure time value of money is the concept that money available today is worth more than the same…

Q: 2) explain the differences between the following two fundamental factors of finance in international…

A: 2 fundamental factors are: International transfer of funds Transfer prices

Q: How can we determine the project cash flows in the absence of inflation?

A: Project Cash Flows are the Net cash flows of the project i.e. Sources of cash less uses of cash. The…

Q: Define the following terms: primary market, secondary market, capital market, money market.

A: The primary market is the market under which the securities of the companies are created. In the…

Q: What is a functional currency? What is the Intercst Coverage (Times Intcrest Earned) Ratio?

A:

Q: Calculate a currency's foward premium or discount based on interest rate differentials.

A: Using Interest rate parity theory, forward rate are calculated as follows by assuming the two…

Q: What is the difference between the time periods being measured with real income and exchange rates?

A: When referring to an individual's income, real income is the amount of money earned after inflation…

Q: What does the term “risk” mean in the context of capital budgeting; to what extent can risk be…

A: Capital budgeting is the process of evaluating and selecting long-term investment projects that are…

Q: Consider the money market. What happens and why to interest rates during an economic expansion…

A: During business cycle expansion, there is an increase in income, employment, and real output with in…