1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
djyliett [7]
3 years ago
13

You can buy or sell the £ spot at $1.98 to the pound. You can buy or sell the pound one-year forward at $2.01 to the pound. If U

.S. annual interest rates are 5 percent, what must be the approximate one-year British interest rate if interest rate parity holds?
Business
1 answer:
Aleonysh [2.5K]3 years ago
5 0

Answer:

X= 3.45%

Explanation:

Data provided

One year future exchange rate = $2.01

Spot exchange rate = $1.98

Interest rate is USA = 5%

The computation of British interest rate is shown below:-

Assume Interest rate in UK = X%

One year future exchange rate = Spot exchange rate × (1 + Interest rate is USA) ÷ (1 + X%)

$2.01 = $1.98 × (1 + 5%) ÷ (1 + X%)

$2.01 ÷ $1.98 = (1 + 5%) ÷ (1 + X%)

(1 + X%) = 1.05 ÷ 1.01515

X= 3.45%

You might be interested in
Laelle is a confectionery company that manufactures candies. It does not use specific strategies to target children while market
Rudiy27

Answer:

The correct answer is c) undifferentiated targeting strategy.

Explanation:

An undifferentiated targeting strategy considers all possible buyers within the same reference group, which means that it does not determine specific conditions of a group of consumers to target it. Traditional marketing bases its strategy on the differentiated market, after in-depth studies about people's motivations, tastes, needs, etc. In this case Laelle does not use a specific strategy for the children who are supposed to be the main consumers, since for them it is indifferent if it is a child or adult who consumes their products.

6 0
3 years ago
Australia's Health Insurance Commission processes 300 million health claims and makes annual payments of $8 billion of payments
Aleks04 [339]

The insurance company would store all its information in a <u>data warehouse</u> to support management decision making.

<h3>What is a data warehouse?</h3>

This means the large store of data that was accumulated from a wide range of sources within a firm and are used to guide the management decisions.

Therefore, the data warehouse is the facility that will store tha data for future use and to support management decision making.

Read more about data warehouse

<em>brainly.com/question/25885448</em>

7 0
1 year ago
Mark avoids high-end brands as he considers them expensive. However, during one of his shopping trips, he notices that a luxury
balandron [24]

Answer:

<em>Just Meaningful Difference </em>

Explanation:

The Just meaningful difference , or simply JMD, Symbolizes the slightest amount of stimulation shift which would impact consumption and preference of consumers.

Example will include, when a price of a can of soda increases slightly from $2.36 to $3.28

8 0
3 years ago
Mauve starts a business that specializes in procuring and selling antique items. Her business caters specifically to individuals
stepan [7]

Answer:

The opportunity of exploiting market niches is highlighted in the given scenario.

Explanation:

A market niche is "a small but profitable segment of a market suitable for focused attention by a marketer. Market niches do not exist by themselves, but are created by identifying needs or wants that are not being addressed by competitors, and by offering products that satisfy them. See also market segmentation. "

Reference: WebFinance Inc. “What Is Market Niche? Definition and Meaning.” BusinessDictionary.com, 2019

6 0
3 years ago
You just won the Powerball and are offered two payment options: 1) Receiving $80 million per year for 25 years beginning at next
laila [671]

Answer: $80 million per year for 25 years

Explanation:

The option you should choose is one that will guarantee you the highest present value.

This means that you need to discount the annual payment of $80 million per year for 25 years to find the present value. As you did not include a rate, we shall assume a rate of 8% for reference purposes.

The annual payment is an annuity so the present value can be calculated by:

Present value of annuity = Annuity payment * Present value interest factor, rate, no. of years

= 80,000,000 * Present value interest factor, 8%, 25 years

= 80,000,000 * 10.6748

= $‭853,984,000‬

<em>The present value of the annual payment is more than the present value of the $850 million received today so the Annual payment should be taken. </em>

7 0
3 years ago
Other questions:
  • Tony charges $5 to park a car in his parking lot. He pays $40 per day to rent the lot. If 50 cars park in his lot during the day
    6·1 answer
  • Jeff cannot find any of his receipts for entering into his budget. In addition, he cannot find any of his bank statements. What
    10·1 answer
  • Which of the following manufacturing costs is an indirect cost of producing a product? amissions for sales personnel b.memory ch
    15·1 answer
  • When using discounted cash flow analysis for valuation, the appraiser must estimate the sale price at the end of the expected ho
    15·1 answer
  • Over the period of a year, Sam’s net worth increased. Which of the following could be true?
    10·2 answers
  • Meet a market meaning?
    11·1 answer
  • A ________ decision is best explained by the following: When a company’s finance department decides to go to the organizations u
    11·1 answer
  • Braden is in the 12% marginal tax bracket with a taxable income of $36,000 for the year. In addition, Braden has a $500 long-ter
    10·1 answer
  • A new business should be based on an entrepreneur's individual interests because the entrepreneur must
    10·1 answer
  • It Isn't necessary to consider convenlence Issues when selecting a bank.<br> O True<br> O False
    5·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!