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
sergejj [24]
3 years ago
8

One-year interest rates are currently 2.50% in the United States and 3.70% in Great Britain. The current spot rate between the p

ound and dollar is $1.9000/£. What is the expected spot rate in one year if the international Fisher effect holds?
Business
1 answer:
DochEvi [55]3 years ago
3 0

Answer:

$1.8780/£

Explanation:

According to the international Fisher effect, the relationship between the interest rate and the exchange rate between two countries A and B, after one year, is:

F=\frac{1+r_A}{1+r_B}*C

Where F is the future exchange rate, r is the interest rate, and C is the current exchange rate.

If the US has an interest rate of 2.50%, the UK has a rate pf 3.70% and the current exchange rate is $1.9000/£, the spot rate in one year will be:

F=\frac{1+0.0250}{1+0.037}*1.9000\\F = \$1.8780/\pounds

In one year, the spot rate will be $1.8780/£.

You might be interested in
Product or service offered, how much,<br> at what price
Bogdan [553]

Answer:

Realizing the contrast among cost and worth can expand benefit: the expense of your item or administration is the sum you spend to deliver it. the cost is your money related award for giving the item or administration. the worth is the thing that your client accepts the item or administration is worth to them

Explanation:

.

6 0
3 years ago
Rao Construction recently reported $28.00 million of sales, $12.60 million of operating costs other than depreciation, and $3.00
stich3 [128]

Answer:

a. $12.40

Explanation:

EBIT stands for earnings before interest and taxes; therefore, interest and taxes rates should not be considered. The EBIT is determined as the amount from sales deducted by operating costs and depreciation. The EBIT is:

EBIT = \$28.00-\$12.60-\$3.00\\EBIT=\$12.40

The answer is alternative a. $12.40.

6 0
3 years ago
Waitstaff at restaurants typically do what?
Aleksandr-060686 [28]
Option A, but even that is not a requirement.
Hope it helps!
7 0
3 years ago
Read 2 more answers
Why do many people avoid the topics of taxes more than other areas of personal financial planning?
Maksim231197 [3]
Good point things don’t make sense like this but I’m answering my first question
7 0
3 years ago
What is operating a vocation? explain with example.​
SVEN [57.7K]

I'm not really sure about that tho

5 0
3 years ago
Other questions:
  • Ralph is a professional football player. He signs a valid contract with the Jets. Later, the Giants offer him more money, so he
    9·1 answer
  • Riley Company promises to pay Janet Anderson or her estate $150,000 per year for the next 10 years, even if she leaves the compa
    12·1 answer
  • "7 out of 10 dentists recommend brand x toothpaste". this finding is based on the results of a survey of 10 randomly selected de
    5·1 answer
  • Incorporators are required to sign the charter, deliver it to the proper state officials, and purchase a certain percentage of t
    8·1 answer
  • Describe an example of a task that it might make sense for a company to outsource.
    5·1 answer
  • A 2-year Treasury security currently earns 1.94 percent. Over the next two years, the real risk-free rate is expected to be 1.00
    12·1 answer
  • Greg had selected 8 intervals total to service. He logged in on time for each interval, but ended up logging out 5
    7·1 answer
  • . Consider an economy that produces only chocolate bars. In year 1, the quantity produced is 4 bars and the price is $4. In year
    9·1 answer
  • Farmer's Fine Furnishings manufactures upscale custom furniture. Farmer's currently uses a plantwide overhead rate based on dire
    14·1 answer
  • Discuss the various levels of management in the organization ​
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!