Answer:
1) €918
2) E$/€)= 1.13
Explanation:
1) the dollar-Euro exchange rate (E$/€) if 1.1 means that from one Euro you can buy 1.1 dollars. So if an American investor invests $1,000 today in Euros he will get 1000/1.1= 909.09 Euros. Then if he invests 909.09 euros at an interest rate of 1% he will have (909.09*1.01)=918 euros.
The formula for forward exchange rate is
FWD= Spot price *(1+Interest rate of variable currency *Days/Annual Base)/(1+interest rate of base currency *days/annual base)
In this case the spot price is 1.1, the euro is the base currency and the dollar is the variable currency. The annual base is 365 and the days are also 365 since the we to find 1 year forward rate so days/annual base is 1.
FWD= 1.1*(1.04*1)/(1.01*1)= 1.13
This means that in a one year forward one Euro will cost $1.13
Answer:
Tolerance
Explanation:
Risk tolerance: It is defined as level of risk that an organization is willing to take for completing any specific task. Evaluating the risk in the trade off between perfect security and unlimited accessibility as risk of security breach is still there instead of perfect security as there is unlimited accessibility, however, how much risk can be tolerated or accepted need to be evaluated and can be mitigated.
There are different technique been used to minimize the risk factors are:
- Avoidance.
- Reduction.
- Sharing.
- Retention.
Answer:
The quadrilateral is drawn above
Answer:
B. Increase production and thus increase the supply.
Explanation:
As the price of Jeans rises, the Levi Strauss is likely to increase production keeping other factors constant as per the law of supply, where quantity is directly proportional to the price of goods and services. As the price of goods increase, the quantity supply of product also increased by supplier or manufacturer to maximize the profit out of the current market condition.
