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frozen [14]
3 years ago
9

National Bank quotes the following for the British pound and the New Zealand dollar: Quoted Bid Price Quoted Ask Price Value of

a British pound (£) in $ $1.61 $1.62 Value of a New Zealand dollar (NZ$) in $ $.55 $.56 Value of a British pound in New Zealand dollars NZ$2.95 NZ$2.96 Assume you have $10,000 to conduct triangular arbitrage. What is your profit from implementing thisstrategy?
Business
1 answer:
Snowcat [4.5K]3 years ago
7 0

Answer:

$15.43

Explanation:

Following actions are required for triangular arbitrage:

Available: $ 10,000

Buy sterling pound @ 1 $ = 1.62 pounds and receive pounds 6172.84 upon conversion.

Now, sell these pounds and purchase NZ $ at the rate :

1 pound = NZ $ 2.95 and receive NZ$ 18209.87

Now, reconvert the above proceeds into US $ at the rate

1 NZ $ = $0.55 i.e sell NZ $ at this rate and receive US $ 10,015.4285

Hence profit from implementing triangular arbitrage is $10,015.43 - $10,000

= $15.43

Arbitrage refers to the prospect of earning a profit by utilizing the mispricing in two different financial markets. An arbitrageur never uses his own funds and always borrows.

Arbitrage works only in the scenario wherein the interest rate purchase parity (IRPT) does not hold good.

The strategy of arbitrage is best explained as "Buy at low price and sell at a high price".

 

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The Fed wants to fight inflation. What action should they take regarding the discount rate, the RR, or open market operations?
Sergio039 [100]

Answer: See explanation

Explanation:

Inflation is when there's a general increase in the price level in an economy. To tackle inflation, the Fed can increase the interest rate as this will discourage people or firms from borrowing and hence there'll be a reduction in the money supply.

Also, the Fed can sell bond to the public, thereby taking in the cash in the economy and reducing the money supply thus reducing inflation. Lastly, the Fed can also increase the reserve ratio for banks. When this is done, there'll be lesser money available in the economy.

4 0
3 years ago
On February 1, the Acts Tax Service received a $3,600 cash retainer for tax preparation services to be provided rateably over th
MatroZZZ [7]

Answer:

$2,700

Explanation:

The computation of the unearned service revenue balance reported on the February 28 balance sheet is shown below:

= Total cash received - expired service revenue

= $3,600 - $900

= $2,700

The expired service revenue is

= Received amount ÷ number of months

= $3,600 ÷ 4 months

= $900

It is come by deducting the expired service revenue from the total cash received so that the balance could come

7 0
3 years ago
Who is the Father of accounting
vovangra [49]

Answer:

Luca Pacioli

Luca Pacioli, was a Franciscan friar born in Borgo San Sepolcro in what is now Northern Italy in 1446 or 1447.

5 0
3 years ago
Majestic Corporation manufactures wheel barrows and uses budgeted machine hours to allocate variable manufacturing overhead. The
andre [41]

Answer:

$409185

Explanation:

Given: Budgeted output units: 28,475 units

Budgeted machine-hours: 17,085 hours

Budgeted variable manufacturing overhead costs for 28,475 units: $358,785

Actual output units produced: 32,475 units

Actual machine-hours used: 15,000 hours

Actual variable manufacturing overhead costs: $384,060.

First, we will find Budgeted machine hour per unit produced.

Budgeted machine hour per unit produced=  \frac{Budgeted\ machine\ hour}{Budgeted\ units}

⇒Budgeted machine hour per unit produced= 17085\div 28475= 0.6

∴Budgeted machine hour per unit produced= 0.6

Budgeted machine hours allowed for 32475 units= 32475\times 0.6= 19485

Budgeted variable overhead rate per machine hour= \textrm {Budgeted variable manufacturing overhead costs}\div Budgeted\ machine\ hours

Budgeted variable overhead rate per machine hour= 358785\div 17085= \$ 21

Now, lets find out flexible budget amount.

Flexible budget amount= \textrm{Budgeted machine hours allowed}\times \textrm{Budgeted variable overhead rate}

Flexible budget amount= 19485\times \$ 21= \$ 409185

∴Flexible budget amount for variable manufacturing overhead= $409185

6 0
3 years ago
A ______ is a division of the firm itself that can be managed and operated independently from other divisions. Multiple choice q
grandymaker [24]

Strategic business unit (SBU) is a division of the firm itself that can be managed and operated independently from other divisions.

<h3>What is strategic business unit (SBU)?</h3>

It is a business unit that runs independently and it is focused on a target or particular market.

  • It is a big market that has its own various support functions that include training departments, hiring department.

Therefore, Strategic business unit (SBU) is a division of the firm itself that can be managed and operated independently from other divisions.

For more details on strategic business unit kindly check

brainly.com/question/24684801

6 0
2 years ago
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