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
adelina 88 [10]
3 years ago
8

Assume that the interest rate on borrowings in India is 1 percent while the interest rate on bank deposits in a U.S. bank is 6 p

ercent. John, an active currency trader, borrows in Japanese yen, converts the money into U.S. dollars and deposits it in a U.S. bank. The speculative element of John's carry trade is that its success is based upon his belief that
Multiple Choice

there will be no adverse movement in exchange rates or interest rates.

liquidity is the key factor in determining interest rates.

increasing money supply will not drive inflation.

hedging insures a company against foreign exchange risks.

spot exchange rates are more favorable than forward exchange rates.
Business
2 answers:
Marysya12 [62]3 years ago
7 0

Answer:

  • there will be no adverse movement in exchange rates or interest rates.

Explanation:

John's best speculative element is that everything would remain in his favor; especially the exchange rates and there interest rates.

Assuming after his transaction there is a sudden negative or adverse effects on the interest rate from 6 percent to 1 percent for US deposit and a decline in the USD/Japanese Yen exchange rate he <u>would be faced with great loses.</u>

FrozenT [24]3 years ago
6 0

Answer:

There will be no adverse movement in the exchange rates or interest rates

Explanation:

John's speculative element is that there will be no adverse movement in the exchange rates or interest rates . that is why he borrowed in Japanese Yen and converted it to U.S dollars and also deposited it into a U.S bank with the hope of earning a high interest rate on his money.

If the interest rates on bank Deposits in the U.S drops from 6% and the interest rate on borrowings in India increases above 1% with an adverse change in the exchange rate between Japanese Yen and U.S dollar John would lose alot of his money

You might be interested in
Your first job is to settle the dispute between the owners. To settle the dispute, you need to ensure that both owners understan
Aneli [31]

Answer:

Inelastic: Demand for business goods tends to be me more inelastic than demand for consumer goods.

Explanation:

I already did this before. ur welcome

4 0
2 years ago
In the actual economy, goods and services are purchased byA. households, but not firms or the government. B. households and the
GenaCL600 [577]

Answer:

C. households, firms, and the government.

Explanation:

In the actual economy, goods and services are purchased by households, firms, and the government.

7 0
3 years ago
Farah Snack Co has earnings after taxes of $128, 750. Interest expense for the year was $20,000: preferred dividends paid were $
Leto [7]

Answer:

A. $0.90

Explanation:

Earning per share = (Net Income - dividends on preferred stocks)/average outstanding common shares

Particulars                                                               Amount

Earning After Tax                                                       128750

Taxes                                                                       15000

Earning before Tax & Interest Expense               143750

Interest Expense                                                      (20000)

Earning after Interest, but before Tax                       123750

Taxes                                                                       (15000)

Earning after Taxes                                               108750

Preferred Dividends                                               (18750)

Earning available for common stock holders       90000

common stock outstanding                                      100000

Earning per share                                                         0.9

Therefore, The outstanding Earnings per share on the common stock was $0.90

8 0
3 years ago
Assume that the international Fisher effect (IFE) holds between the U.S. and the U.K. The U.S. inflation is expected to be 5%, w
Lesechka [4]

Answer:C. Real interest rates expected by British investors are 2 percentage points higher than the real interest rate expected by US investor.

Explanation:

The real interest rate is the market interest rate less the inflation rate.

The inflation rate always reduce the purchasing power of money which is the real measure of the purchasing power of money and not the money face value.

6 0
2 years ago
If the keyword an advertiser is bidding on is used in the ad and on the landing page, then the advertiser will receive a higher
cricket20 [7]

Answer:

If the keyword an advertiser is bidding on is used in the ad and on the landing page, then the advertiser will receive a higher Quality Score for

ad relevance.

Explanation:

Ad relevance is a component that gives an advertiser higher quality score.  It is an indication that the keyword is optimized to meet the customer's search query.  It shows how closely the ad matches the customer's search because a correlation exists between the keyword, the ad, and the post-click landing page.  It is paramount to achieve ad relevance in any pay-per-click advertising (PPC), otherwise called search engine marketing (SEM) or search advertising, to justify the ad costs.

8 0
2 years ago
Other questions:
  • On January 1, 2018, Byner Company purchased a used tractor Byner paid $3,000 down and signed a noninterest-bearing note requirin
    6·1 answer
  • The two-step process of reporting includes
    5·1 answer
  • Adjusting Entries are:
    5·2 answers
  • One of the advantages of communicating through email rather than through letters and telephone calls is
    6·1 answer
  • Prepare entries in a job order cost system and job cost sheets.
    10·1 answer
  • business ethics chapter 7 emily, a website designer, is hired by an organization to create an internal website that contains inf
    7·1 answer
  • An employee receives an hourly rate of $25, with time and a half for all hours worked in excess of 40 during a week. Payroll dat
    12·1 answer
  • The bookkeeper for Sheffield Corp. asks you to prepare the following accrued adjusting entries at December 31.
    15·1 answer
  • What is a commodity
    15·2 answers
  • There is an inverse relationship between followers and engagement -- surprisingly, the more followers, the LESS engagement with
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!