ECONOMICS

2. Suppose a Canadian agent (investor) with C$1.0 million is choosing between bank deposits denominated in either euro or Canadian dollars. Also suppose that the (one-year) interest rate paid on the C$ deposits is 1% (0.01) and on the euro deposit is 2% (0.02), the (one-year) forward C$-EURO exchange rate (FC$/€ ) is 1.60 and the current spot rate (EC$/€ ) is 1.65. Based on this information, answer the following questions.

(a) What is the forward spread? Is the Canadian dollar at forward premium or discount? And by how much (%)?

(b) What is the (hedged = riskless) rate of return on the euro deposits?

(c) Based on your answer above, is there an arbitrage opportunity between the two deposits? Explain why or why not.

(d) If the spot rate of exchange as well as the interest rates are kept at their current levels (stated above), what will be equilibrium forward rate as implied by the covered interest parity theory (CIP)?

True statement for a business plan among following :

(C)Business Plan Provide Road map for future plan  true statement for a business plan .

A business plan is a written description of your business's future. That's all there is to it--a document that describes what you plan to do and how you plan to do it.

Explanation:

A business plan can help to direct business for its future and avoid bumps in the road. A Business Plan series provides detailed instructions for working through each section of the business plan.

Although Business plan doesn't guarantee success but provide detailed financial projections, forecasts about your business's performance, and a marketing plan that may help to achieve business goals.

d. all of the above are true.

urban company reports the following information regarding its production cost: units produced 37,000 units direct labor $ 30 per unit direct materials $ 35 per unit variable overhead $ 237,000 in total fixed overhead $ 127,000 in total