The treasurer of a major U.S. firm has $30 million to invest for three months. The interest rate in the United States is 15 percent per month. The interest rate in Great Britain is .26 percent per month. The spot exchange rate is £.813, and the three-month forward rate is £.827. What would be the value of the investment if the money is invested in the U.S and Great Britain? (Enter your answers in dollars, not in millions of dollars, and round your answers to 2 decimal places, e.g., 1,234,567.89.) X Answer is not complete. U.S. 30,135,000.00 Great Britain
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- The treasurer of a major U.S. firm has $30 million to invest for three months. The interest rate in the United States is .15 percent per month. The interest rate in Great Britain is .26 percent per month. The spot exchange rate is £.813, and the three-month forward rate is £.827. What would be the value of the investment if the money is invested in the U.S and Great Britain? (Enter your answers in dollars, not in millions of dollars, and round your answers to 2 decimal places, e.g., 1,234,567.89.) U.S. $ 30,135,000.00 Great BritainThe treasurer of a major U.S. firm has $30 million to invest for three months. The interest rate in the United States is 15 percent per month. The interest rate in Great Britain is .26 percent per month. The spot exchange rate is £.813, and the three-month forward rate is £.827. Ignore transactions costs. a. If the treasurer invested the company's funds in the U.S., how much would the investment be worth after three months? Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, 1,234,567.89. b. If the treasurer invested the company's funds in Great Britain, how much would the investment be worth after three months? Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, 1,234,567.89. a. U.S. investment b. Great Britain investmentThe treasurer of a major U.S. firm has $22 million to invest for three months. The interest rate in the United States is .22 percent per month. The interest rate in Great Britain is .27 percent per month. The spot exchange rate is £.622, and the three-month forward rate is £.624. Ignore transaction costs. What would be the value of the investment in three months if the money is invested in the U.S. or if it is invested in Great Britain? (Do not round intermediate calculations and enter your answers in dollars, not in millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.) U.S. Great Britain
- The treasurer of a major U.S. firm has $31 million to invest for three months. The interest rate in the United States is 30 percent per month. The interest rate in Great Britain is.34 percent per month. The spot exchange rate is £.630, and the three-month forward rate is £.632. What would be the value of the investment if the money is invested in the US and Great Britain? (Do not round intermediate calculations and enter your answers in dollars, not in millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.) U.S. Great BritainThe treasurer of a major U.S. firm has $41571485 to invest for three months. The annual interest rate in the United States is 0.25% per month. The interest rate in Great Britain is 0.63% per month. The spot exchange rate is £0.72, and the three-month forward rate is £0.74. Ignoring transaction costs, what would be the NPV of investing in Great Britain as opposed to invest in the U.S.?The treasurer of a major U.S. firm has $31276878 to invest for three months. The annual interest rate in the United States is 0.35% per month. The interest rate in Great Britain is 0.59% per month. The spot exchange rate is £0.72, and the three-month forward rate is £0.74. Ignoring transaction costs, what would be the NPV of investing in Great Britain as opposed to invest in the U.S.? NOTE: Enter the number rounding to four decimal places
- Suppose that the treasurer of IBM has an extra cash reserve of $100,000,000 to invest for six months. The interest rate is 12 percent per annum in the United States and 11 percent per annum in Germany. Currently, the spot exchange rate is €1.05 per dollar and the six-month forward exchange rate is €1.03 per dollar. The treasurer of IBM does not wish to bear any exchange risk. Where should he or she invest to maximize the return?Suppose that the treasurer of IBM has an extra cash reserve of $100,000,000 to invest for six months. The six-month interest rate is 8 percent per annum in the United States and 7 percent per annum in Germany. Currently, the spot exchange rate is €1.01 per dollar and the six-month forward exchange rate is €0.99 per dollar. The treasurer of IBM does not wish to bear any exchange risk. Where should he/she invest to maximize the return?Suppose that the treasurer of IBM has an extra cash reserve of $100,000,000 to invest for six months. The six-month interest rate is 12 percent per annum in the United States and 11 percent per annum in Germany. Currently, the spot exchange rate is €1.20 per dollar and the six-month forward exchange rate is €1.18 per dollar. The treasurer of IBM does not wish to bear any exchange risk. Where should they invest to maximize the return? Required: a. The maturity value in six months if the extra cash reserve is invested in the U.S.: Note: Do not round intermediate calculations. b. The maturity value in six months if the extra cash reserve is invested in Germany: Note: Do not round intermediate calculations. Round off the final answer to nearest whole dollar. c. Where should they invest to maximize the return? a. Maturity value b. Maturity value C. Better investment
- Suppose that the treasurer of IBM has an extra cash reserve of $400,000 to invest for six months. The six-month interest rate is 4.3 percent per annum in the United States and 3.2 percent per annum in Germany. Currently, the EUR/USD is 1.2248 and the six-month forward exchange rate is1.2351. The treasurer of IBM does not wish to bear any exchange risk. How much would IBM have if they choose to invest in Europe hedging their risk? (USD, no cents)An investor has $2m to invest and has the option of placing it in a US bank account paying 2% annually, or in a German bank, where the annual rate of interest is only 2.5%. If the current exchange rate for the Euro is given as $1.4250, at what 1-year Dollar-Euro forward rate of exchange would the investor get the same return from investing in the US as he/she would by investing in Germany? Please show your work.Due to your export to Thailand, you have an account receivable in six months from today in the amount of 525.00 million in Thai Baht (TB). The data that you have compiled are below. In addition, you are told that for simplicity you should assume that the interest rate in each country is the same for borrowing or lending. You would like to hedge the foreign exposure of this account. Thai Baht (TB) is the currency of Thailand. • Spot rate: TB 32.72/$ • Forward rate (six months): TB 34.30/$ • U.S. prime rate: 3.2 percent (borrowing or lending). Prime rate is an interest rate. • Thailand interest rate: 6.0 percent (borrowing or lending) • The firm borrows and invests at the market rates. Answer questions 1 through 6 based on the above information. If you choose to do nothing (=do not hedge), the dollar outcome at the end of the six months is: 16.0452 million 15.3061 million Unknown 15.6291 million 17178.0 million