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blsea [12.9K]
3 years ago
14

The current spot exchange rate is $1.55/£ and the three-month forward rate is $1.50/£. Based on your analysis of the exchange ra

te, you are confident that the spot exchange rate will be $1.52/£ in three months. Assume that you would like to buy or sell £1,000,000. What actions do you need to take to speculate in the forward market? What is the expected dollar profit from speculation?
a. Sell £1,000,000 forward for $1.50/£.
b. Buy £1,000,000 forward for $1.50/£.
c. Wait three months, if your forecast is correct buy £1,000,000 at $1.52/£
d. Sell £1,000,000 today at $1.55/£; wait three months, if your forecast is correct buy £1,000,000 back at $1.52/£
Business
1 answer:
Misha Larkins [42]3 years ago
4 0

Answer:

b. Buy £1,000,000 forward for $1.50/£.

Explanation:

Let's say for instance, we agree to make purchase of €1,000,000 and then forward for $1.50/€ and we assume that the price turns out to become $1.62/€ in three months time, the expected profit will be $12,000 = €1,000,000 ($1.62 - $1.50)As we can see, answer d looks convincing from an accounting standpoint, but it is wrong because the question asks us to make money with a forward contract, not by holding a particular spot. The correct option should be option b.

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Builtrite has two bond issues outstanding(sold two separate groups of bonds over the years). One issue has a 7 year maturity and
baherus [9]

Answer:

C

Explanation:

Here, we want to select which of the given options in the question is true/correct.

From the question we can observe that the two bonds have required return less than coupon rate. Hence we can conclude that, both are premium bonds. The 7-years bond however. will have closer price to par value.

Bond prices will gradually decrease as we have a decrease in years to maturity. This means that the closer the year to maturity, the lesser the value of the bond price

4 0
3 years ago
Leadership in small firms is more ____ in comparison to the leadership in large corporations.
enyata [817]

Answer:

different

Explanation:

There is  a significant difference in small firms leadership compared to large firms depending on legal structures, number of employees in a firm and financial availability.

Large firms have more departments, employees, and operations compared to small ones. For instance, the leadership style and structure required to manage operations and employees in large firms will need to be highly structured to ensure there is effective  command and information flow. For small firms, a simple command and communication flow structure will suffice as the number of employees and departments involved are few.

8 0
3 years ago
Percy works two part-time jobs to help pay for college classes. On Monday, he works 3 hours at the library and 2 hours at the co
shepuryov [24]

There are numerous types of part time jobs are available nowadays in order to earn money for the qualified workers. People can earn through part-time jobs without quieting their full-time opportunities.

<h3>How much does Percy earn each hour? </h3>

Correct option is C.

For the answer to the two questions above,

3x + 2y = 36.50.... (1)

2x + 5y = 50..... (2)

Then, Eliminating x from the two equations by subtraction:

First we multiply equation 1 by 2 and equation 2 by 1.

6x + 4y = 73

6x + 15y = 150

After that, Subtracting the two,

-11y = -77

y=-77/-11

y = 7

He earns $7 at the coffee cart.

Then, Substituting y into equation 1,

3x + 14 = 36.5

3(7)+14=36.5

x = $7.50

Therefore, he earns a greater wage of $7.50 at the library.

Learn more about part-time jobs, refer to the link:

brainly.com/question/919744

6 0
2 years ago
Suppose the consumption function is c = $200 + 0.85yd. if disposable income is $400, consumption is
alexira [117]
Given the consumption equation of c= 200 + 0.85yd, and the disposable income of $400, then, then we would get the consumption by substituting the given to the equation:c= 200 + 0.85ydc= 200 + 0.85(400)c= 200 + 340c= 540Therefore, the consumption is $540.
8 0
3 years ago
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Suppose i would like to prevent a line break in word from splitting apart my customer's title and name, "mr. jones", should it h
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That is really hard to answer what are u working on
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