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
your local pawn shop loans money at an annual rate of 24 percent and compounds interest weekly. What is the actual rate being ch
Alika [10]

Answer:

27%

Explanation:

The actual rate being charge on these loans is the effective annual rate and the formula to calculate it is:

i=(1+(r/m))^m−1

i= effective annual rate

r= interest rate in decimal form=0.24

m=number of compounding periods per year= 52 (a year has 52 weeks).

i=(1+(0.24/52))^52-1

i=1.27-1

i=0.27

According to this, the answer is that the actual rate being charge on these loans is 27%.

6 0
3 years ago
Bishop, Inc., is obligated to pay its creditors $8,900 during the year. a.What is the market value of the shareholders' equity i
Contact [7]

Answer:

The answer is $1,500

Explanation:

Accounting equation can be stated as follows:

Equity = Asset - Liability

Asset = Equity + Liability

Liability = Asset - Equity.

What a firm is obligated to pay its creditors is known as a liability and its value in the question is $8,900

The assets owned by the company totalled $10,400

Now to find market value of the shareholders' equity, we use:

Equity = Asset - Liability

$10,400 - $8,900

= $1,500

7 0
3 years ago
As the workforce becomes more diverse, why does performance appraisal become a more difficult process?
Olenka [21]

Answer:

Performance appraisal in a company with diverse workforce becomes difficult because of some cultural biases that may exist between the manager, who is doing the appraisal, and the diverse workforce.  This problem becomes more acute if the manager is culturally biased and discriminatory by practise.

Explanation:

Company A can have a diverse workforce if it is made up of employees from culturally different places working together in the same workplace.  Bias often arises due to human cultural nuisances.  This becomes more obvious where managers are from some particular cultures while the employees are from mixed cultures.  In such situations, the managers need to be retrained to enable them embrace cultural diversity in the workplace and in performance evaluation.

6 0
3 years ago
How much would $100, growing at 5% per year, be worth after 75 years? a. $4,077.43 b. $4,281.30 c. $3,883.27 d. $3,689.11 e. $4,
Zielflug [23.3K]

Answer:

The answer is c. $3,883.27

Explanation:

For the problem, we will be using the formula for calculating the Future Value of money, which is:

F= P(1+r)^{n}

Where:

F - future value

P - Principal amount = ($100)

r - rate of growth in percent = (5% or 0.05)

n - number of years = (75)

We calculate thus:

F = 100(1 + 0.05)^{75}

F = 100(1.05)^{75}

F = 100  X  38.8327

F = 3,883.27

therefore the amount after 75 years will be $3,883.27

5 0
2 years ago
Your company is about to undertake a major investment project. The project will require an initial outlay of $100 million for fi
Tcecarenko [31]

Answer:

A) initial outlay = $150 million

Cash flow year 1 = [($30 - $25) x 0.6] + $25 = $28

Cash flow year 2 = [($30 - $25) x 0.6] + $25 = $28

Cash flow year 3 = [($30 - $25) x 0.6] + $25 = $28

Cash flow year 4 = [($30 - $25) x 0.6] + $25 + ($25 x 60%) + $50 = $93

B) Using a financial calculator, NPV = -$16.85 million

C) cash flow year 4 should increase by $24.667 million, meaning that the selling price must increase by $$24.667/0.6 = $41.11 million

minimum selling price $25 + $41.11 = $66.11 million

7 0
2 years ago
Other questions:
  • Which of the following is a drawback of virtual teams?a. They are highly rigid because of organizationally dispersed team member
    9·2 answers
  • "how would the distribution of income change if social security were privatized?"
    6·1 answer
  • "books are the best of things, well used; abused, among the worst. what is the right use? what is the one end which all means go
    12·1 answer
  • Patrick has a written independent contractor agreement with his broker Tami. Last year, about 25% of his income came from sales
    7·1 answer
  • Which of the following scenarios would cause inflation to occur?
    15·1 answer
  • Newhard Company assigns overhead cost to jobs on the basis of 125% of direct labor cost. The job cost sheet for Job 313 includes
    8·1 answer
  • Cypress Exports would like to establish retail outlets in​ Mongrovia, a​ quasi-democratic African country with a growing middle
    12·1 answer
  • An article in the Wall Street Journal on the housing market states that​ "Steady job​ growth, rising wages and low interest rate
    11·1 answer
  • The people in an economy have $10 million in money. there is only one bank that all the people deposit their money in and it hol
    12·1 answer
  • Write a short essay about inventory control( involves kind of inventory reason and approach)​
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!