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
Afina-wow [57]
2 years ago
6

Assume that the interest rate in the home country of Currency X is a much higher interest rate than the U.S. interest rate. Acco

rding to interest rate parity, the forward rate of Currency X:a. should exhibit a discount.
b. should exhibit a premium.
c. should be zero (i.e., it should equal its spot rate).
Business
2 answers:
Rashid [163]2 years ago
6 0

Answer:

A – forward rate of currency X should exhibit a discount

Explanation:

the interest rate parity states that the interest rate differential between 2 countries is equal to the differential between the forward exchange rate and the spot exchange rate (Hayes, 2019). The theory assumes that a currency with lower interest rates will trade at a forward premium in relation to a currency with a higher interest rate (Hayes, 2019). The opposite is true for Currency X and the US Dollar – since currency X is higher than the US interest rate, its forward rate will be a discount. This makes A the correct answer.

Kaylis [27]2 years ago
5 0

Answer:

According to interest rate parity, the forward rate of Currency X should exhibit a discount

Explanation:

Interest rate parity is when the difference between interest rates between two countries is equal to the difference in the spot and forward exchange rates.

Considering country X with currency X.

If currency X has an higher interest rate than US, currency X is expected to exhibit a discount (i.e. a rate used for discounting bills of exchange) in order to balance up with the exchange rate of US by realigning the relationship between the interest rate differential of X and the forward premium (or discount) on the forward exchange rate between the X and USD.

interest rate parity assumes that any currency with lower interest rate will trade at a forward premium compared to a currency with higher interest rate

You might be interested in
The following unadjusted trial balance contains the accounts and balances of Dylan Delivery Company as of December 31, 2010, its
REY [17]

Answer:

Dylan Delivery Company

1. 10-Column Worksheet (see attachment)

2. Closing Journal Entries at December 31, 2010:

Date  Description                        Debit         Credit  

Depreciation expense - Truck    80,000  

Salaries Expense                         111,000  

Office supplies expense             18,000  

Repairs expense- trucks             15,000

Income Summary                                          224,000

To close expenses to the Income Summary.

Date  Description                        Debit         Credit

Income Summary                      263,000

Delivery fees                                                263,000

To close revenue to the Income Summary.

Date  Description                       Debit         Credit

Net Income                                39,000

Retained Earnings                                        39,000

To close the net income to retained earnings.

2b) Capital to be reported on balance sheet as at December 31, 2010:

S. Dylan Capital                 $307,000

Retained Earnings                39,000

S. Dylan withdrawals           (34,000)

Net Capital                        $312,000

Explanation:

a) A 10-column worksheet is a tool used by accountants to close the temporary accounts, after necessary adjustments, and then extract a balance sheet.  It comprises two columns (debit and credit) for each of the following: Unadjusted Trial Balance, Adjusting Entries, Adjusted Trial Balance, Income Statement, and Balance Sheet.

b) A closing entry is a journal entry that is made at the end of an accounting period to transfer balances from a temporary account to a permanent account.  The four basic steps in the closing process are: Closing the revenue accounts—transferring the credit balances in the revenue accounts to a clearing account called Income Summary. Closing the expense accounts—transferring the debit balances in the expense accounts to a clearing account called Income Summary.  Extracting a balance between the revenue accounts and the expense accounts, called the net income or loss.  Closing the net income or loss to the Retained Earnings.

Download xlsx
5 0
3 years ago
whether you write a on page resume a two page resume, or a combination of both, what is the key to writing an effective resume
MariettaO [177]
There’s no problems in the writing
8 0
3 years ago
Read 2 more answers
Rocky River Company is a pricetaker and uses target pricing. Refer to the following information:Production volume 602,000​ units
ladessa [460]

Answer:

$30.07

Explanation:

Rocky river company uses target pricing

The production volume is 602,000 units

The market price is $34 per unit

The total assets is $13,900,000

The desired operating income is 17% of the total assets

= 17/100 × 13,900,000

= 0.17×13,900,000

= 2,363,000

The first step is to calculate the sales value

= 602,000 ×34

= 20,468,000

The total cost can be calculated as follows

= Sales value-desired operating income

= 20,468,000-2,363,000

= 18,105,000

Therefore the target full product cost per unit can be calculated as follows

= Total cost/production volume

= 18,105,000/602,000

= $30.07

Hence the full target product cost per unit is $30.07

7 0
3 years ago
A company issued 5-year, 7% bonds with a par value of $500,000. The market rate when the bonds were issued was 6.5%. The company
san4es73 [151]

Answer:

The correct answer is $17,000.

Explanation:

According to the scenario, the given data are as follows:

Bonds percent = 7%

Par value of bonds = $500,000

Market rate = 6.5%

Cash received = $505,000

So, we can calculate the amount of recorded interest for semiannual interest period by using following formula:

First we calculate the premium on bonds,

So, Premium on bonds = Cash received - Par value of bonds

= $505,000 - $500,000

= $5,000

So, straight line amortization = Premium on bonds ÷ years

= $5,000 ÷ 5

= $1,000

So, Amount of interest expense for first semiannual is as follows:

Amount of interest = ( Par value of bonds × Bonds percent ) ÷ 2 - (straight line amortization ÷ 2)

= ( $500,000 × 7% ) ÷ 2 - ( $1,000 ÷ 2 )

=  $17,500 - $500

= $17,000.

4 0
2 years ago
Culver Company has a stock portfolio valued at $3,500. Its cost was $2,700. If the Fair Value Adjustment account has a debit bal
Ilya [14]

Answer:

Dr Fair Value Adjustment (Available-for-Sale) $660

Cr Unrealized Holding Gain or Loss—Equity $660

Explanation:

Culver Company Journal entry

Dr Fair Value Adjustment (Available-for-Sale) $660

Cr Unrealized Holding Gain or Loss—Equity $660

Fair Value Adjustment (Available-for-Sale)

Debit Balance $140

Adjustment $660

($3,500-$2,840)

Balance 800

8 0
3 years ago
Other questions:
  • Prior to the deal, three soft drink companies sold beverages on campus; now no other soft drink company is allowed to sell its p
    6·1 answer
  • Joe is a pizza delivery worker. the pizza shop he works for has a 30 minutes or less delivery guarantee or else the customer doe
    11·1 answer
  • Nikola Motors has a quick ratio of 2.00; $38,250 in cash; $21,250 in accounts receivable; some inventory; total current assets o
    10·1 answer
  • First Link Services granted 20 million of its $1 par common shares to executives, subject to forfeiture if employment is termina
    10·1 answer
  • Max's Kennels spent $220,000 to refurbish its current facility. The firm borrowed 60 percent of the refurbishment cost at 5.95 p
    13·1 answer
  • The Campus Division of All-States Bank has assets of $1,800 million. During the past year, the division had profits of $225 mill
    9·1 answer
  • Assume the average annual CPI values for 2017 and 2018 were 207.3 and 215.3, respectively. What was the percent increase in the
    11·1 answer
  • A fast food restaurant chain has identified day commuters as its market segment. If the chain wants to persuade this segment to
    14·1 answer
  • 20 pts
    6·1 answer
  • Mishandling and/or improperly managing a borrower’s funds is a practice prohibited by:___.
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!