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Otrada [13]
2 years ago
13

Suppose that the spot price of the US dollar is 1 ($/Canadian dollar) and the one-year forward rate is 1.2 ($/Canadian dollar),

and the 1-year on US deposits is 5 percent. What would the interest rate have to be in Canada to make you indifferent between putting your money there or here
Business
1 answer:
natima [27]2 years ago
7 0

Answer:

6 percent.

Explanation:

To solve this question, we will take help of the Fisher equation,

Therefore,

(Spot rate/Forward rate) = (interest rate in US/Interest rate in Canada),

(1/1.2) = (0.05/x), Now solving for 'x'.

There fore,

x = (1.2 * 0.05) / 1

x = 0.06.

Hope this clear things up

Thankyou.

You might be interested in
The decision making process is best when?
valentina_108 [34]

Answer:

when u have 2 decide between 1 and another or when u r taking a test then u have make a decision

Explanation:

3 0
3 years ago
g Compare and contrast a four Ps approach to marketing versus the value approach (creating, communicating, delivering and exchan
abruzzese [7]

Answer:

The 4Ps are Product, Pricing, Promotion, Place.

Explanation:

Thinking about it carefully, one would note that there is really nothing to contrast between the value approach which is Creating, Communicating, Delivering and Exchanging Value.

Let's make the comparisons:

  • Products and Services are Created. It's impossible to have a product or service that is not created.

The inherent quality of a Utility or Product or Service is that they are value which is Created. So in describing the marketing approach, one can use both interchangeably.

  • Pricing vs Exchanging Value

Again there is a parallel here. Price is the value you have put on your product or service. Without price, it's difficult to exchange value. Again in the marketing process/approach, it's difficult to separate the two. In both approaches, pricing and Exchanging Value as steps in the marketing approach can be used interchangeably.

  • Communicating vs Promotion

This is also another parallel. Promotion is simply another way to communicate the value of your product. Both are really not different.

  • Delivering Value vs Place

Place under the 4 Ps approach speaks to the location where the product is delivered. Again it's clear to see that both cannot be separated.

In conclusion, assuming all factors are the same and held constant between two companies A and B, if company A follows the 4Ps approach and company B follows the Value approach, they are most likely to arrive at the same results.

Cheers!

5 0
3 years ago
Layla made a snide remark to her colleague that he "looks at the customer like henry ford probably did." what did she mean by su
Anarel [89]
She made a snide remark means she's looking to her colleague in a negative or insulting way. If her action is can be compared with how he looks at the customer like henry ford probably did.

Henry Ford is a well-known businessman. What Layla tried to show is that she collogue should treat well their customer because of the source of their money or company's income. 
8 0
2 years ago
Tom lives in an apartment where he pays $8,000 a year in rent. Sarah lives in a house that could be rented for $10,000 a year. H
Misha Larkins [42]

Answer:

these housing services contribute to GDP =   $18000

Explanation:

given data

Tom pay rent = $8000

Sarah house  rented = $10,000

solution

housing services contribute to GDP is express as

housing services contribute to GDP = Tom pay rent + Sarah house rented ............1

As GDP include both rent and estimate rent owner occupy home

put here value in equation 1 we get

housing services contribute to GDP =  $8000 + $10000

housing services contribute to GDP =   $18000

5 0
3 years ago
Onslow Co. purchased a used machine for $178,000 cash on January 2. On January 3, Onslow paid $2,840 to wire electricity to the
Aleksandr-060686 [28]

Answer:

First we must determine the total cost of the machine:

total cost = $178,000 + $2,480 + $1,160 = $181,640

Now we must find the depreciable value:

depreciable value = total cost - salvage value = $181,640 - $14,000 = $167,640

since the machine is going to be used for six years, the depreciation expense per year = depreciable value / useful life

depreciation expense per year = $167,640 / 6 years = $27,940

if it was depreciated during 5 years, the total depreciation expense would be: $27,940 per year x 5 years = $139,700

If the machine was depreciated before time, and sold only at its salvage value, Onslow Corp. should report a loss of $27,940.

7 0
3 years ago
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