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yan [13]
2 years ago
12

5. One-year interest rates are 2% in the U.S. and 5% in Canada. “Jackie the carry trader” borrows $3,000,000 to execute a carry

trade. At the start, the exchange rate is $.881/CAD. After one year, the exchange rate is $.865/CAD
A. What is Jackie’s USD profit or loss over the year?



B. When Jackie starts this trade, she is hoping that the Canadian dollar doesn’t ______________.




C. When Jackie starts this trade, she is hoping that the USD doesn’t
______________.




D. What is the BEEX in one year? (place in terms of USD/CAD to 4 decimal places)
Business
1 answer:
pogonyaev2 years ago
7 0

A)

  • Firstly convert $3000000 into CAD

          So, CAD is 3405221.33938

  • Invest CAD  in Canada 5% for 1 year
  • In t= 1yr realize canadian investment with interest so, CAD  on maturity

        = CAD 3405221.33938 (1+ 0.05)

        = CAD 3575482.40634

  • Again now convert CAD into US $ so, equivalent  US $ realised on conversion = CAD 3575482.40634 * $0.865/ CAD

                            = $ 3092792.28148

  • US repayment = $ 3000000*(1+ 0.02)

                                  = $ 3060000

That's why,

Profit over the year = $3092792.28148- $3060000

                                  = $32792.28148

B) doesn't depreciates relative to USD

C) appreciates relative to Canadian dollar

D) BEEX = US$ borrowings to be repaid with interest/ CAD realized with interest on maturity

               = $3060000/ CAD 3575482.40634

               = 0.8558

Learn more about this-

brainly.com/question/3729664

#SPJ10

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Answer:

The proportion of people in your sample whose response is yes=40 people

Explanation:

<em>Step 1: Determine the statistical proportion that will say yes</em>

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<em>Step 2: Determine the proportion in the sample that will say yes</em>

The proportion in the sample can be expressed as;

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In our case;

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Z=100

replacing;

Proportion in the sample=0.4×100=40

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the loss of producer surplus associated with some sellers dropping out of the market as a result of the tax is
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$60

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The following information is available for Montrose Company at December 31: Cash in bank account $ 8,540 Petty cash $ 250 Short-
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Answer:

Cash $10,430 ; Cash equivalents $20,400

Explanation.

Cash consist of all currencies in hand or any convertible asset which can be converted to cash immediately.

It is to be noted that the assets with high liquidity will be included in cash and cash equivalent balance. They can quickly be converted to cash and would normally have 90 or lesser days to mature.

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$

Cash in bank. 8,540

Petty cash. 250

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Money order. 290

Cash. 10,430

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