Business, 04.05.2021 19:50 mcentire789

Suppose investors can choose any country in which to invest and that every investor in a particular countryearns the same interest rate on investment. Consider the case of an investor deciding between puttingmoney in the USA or India (currency is called rupee, its symbol is ₹). a. If the spot exchange rate is 66.845 ₹/$, interest in the USA is at an annual rate of i$= 4% interest in India is i₹=6%, then would you expect the forward rate one year from now to be more or fewer rupees per dollar?
b. How many rupees would you expect a dollar to be worth on the spot market in one year from now?
c. What would a profit seeking arbitrager do if the actual 12-month forward rate was $0.016/₹?

Answers: 1

Show answers

Another question on Business

Business, 21.06.2019 18:20

When someone buys a fourth television for his or her house, what is the result? a. there's a decrease in the marginal utility of the television. b. the increase in demand brings leads to higher prices for televisions. c. the production of televisions becomes more efficient. d. there's a rise in the opportunity cost of buying other goods.

Answers: 2

Answer

Business, 22.06.2019 15:20

Sauer food company has decided to buy a new computer system with an expected life of three years. the cost is $440,000. the company can borrow $440,000 for three years at 14 percent annual interest or for one year at 12 percent annual interest. assume interest is paid in full at the end of each year. a. how much would sauer food company save in interest over the three-year life of the computer system if the one-year loan is utilized and the loan is rolled over (reborrowed) each year at the same 12 percent rate? compare this to the 14 percent three-year loan.

Answers: 3

Answer

Business, 22.06.2019 21:20

Label each of the following statements true, false, or uncertain. explain your choice carefully. a. workers benefit equally from the process of creative destruction. b. in the past two decades, the real wages of low-skill u.s. workers have declined relative to the real wages of high-skill workers. c. technological progress leads to a decrease in employment if, and only if, the increase in output is smaller than the increase in productivity. d. the apparent decrease in the natural rate of unemployment in the united states in the second-half of the 1990s can be explained by the fact that productivity growth was unexpectedly high during that period.

Answers: 3

Answer

Business, 23.06.2019 10:30

This pie chart shows a sample weekly budget. in this budget, how much money is going toward optional expenses? $70 $75 $10 $35

Answers: 1

Answer

You know the right answer?

Suppose investors can choose any country in which to invest and that every investor in a particular...

Questions