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
The shape of China's production possibilities frontier (PPF) should reflect the fact that as China produces more smartphones and
ArbitrLikvidat [17]

Answer:

Remain same

Explanation:

In this situation, China makes tablets and smartphones only. The equipment used to manufacture these two products is nearly the same, the same collection of tools is equally useful in manufacturing both smartphones and tablets. So there is the constant opportunity cost of both commodities.

Resources are similarly appropriate for the manufacturing of two varied goods at a constant opportunity cost.

Therefore, the opportunity costs for additional smartphone remains the same.

8 0
3 years ago
Classify the following item as belonging in the revenue, expenditure, human resources/payroll, production, or financing cycle:
Semmy [17]

Answer:

d. Establish a $10,000 credit limit for a new customer

s. Collect payments on customer accounts

r. Sell a DVD player

l. Sell concert tickets

a. Purchase raw materials

e. Pay for raw materials

o. Pay utility bills

Expenditure

c. Hire a new assistant controller

f. Disburse payroll checks to factory workers

k. Record factory employee timecards

n. Send new employees to a business ethics course

q. Pay federal payroll taxes

u. Pay sales commissions

Human Resources/Payroll

g. Record goods received from a vendor

j. Complete a picking ticket for a customer order

i. Decide how many units to make next month

v. Send an order to a vendor

w. Put purchased goods into the warehouse

Production

b. Pay off mortgage on a factory

h. Update the allowance for doubtful accounts

m. Draw on line of credit

p. Pay property taxes on an office building

t. Obtain a bank loan

Financial Cycle

Explanation:

6 0
3 years ago
If there is a high demand for a product, then production will be__.
Cloud [144]

Answer:

the answer is b. increased

6 0
2 years ago
Read 2 more answers
Which is a correct statement regarding sandwich prices,<br><br> based on the histogram?
Fudgin [204]

Answer:

Which is a correct statement regarding sandwich prices, based on the histogram? The distribution of sandwich prices is skewed left.

i hope this helps<3 :)

4 0
2 years ago
11. (-/1 Points] DETAILS BRECMBC9 5.11.010.
Lisa [10]

Answer:

2190 ; 2560 ;

$778.2

Explanation:

Total worth of gasoline sold = 16003.50

Cost of regular = 3.30

Cost of premium = 3.45

Let :

premium Gallon sold = x

Regular gallon sold = 370 + x

Hence, mathematically;

(3.45*x) + (3.30 * (x + 370)) = 16003.50

3.45x + 3.30x + 1221 = 16003.50

6.75x = 16003.50 - 1221

6.75x = 14782.5

x = 14782.5 / 6.75

x = 2190

Premium Gallon sold = 2190 gallons

Regular gallon sold = 2190 + 370 = 2560 gallons

Profit per regular gallon sold = $0.15

Progit per premium Gallon sold = $0.18

Total profit = (2190 * 0.18) + (2560 * 0.15) = $778.2

7 0
2 years ago
Other questions:
  • A team consists of employees from the same department who meet for a few hours each week to discuss ways of improving the work e
    5·1 answer
  • On october 10, the stockholders’ equity of sherman systems appears as follows:
    5·1 answer
  • Which of the following statements is FALSE? A) If we increase the fraction invested in the efficient portfolio beyond 100%, we a
    11·1 answer
  • Suppose there are only two types of goods to consume: food and leisure. An average Californian citizen has a daily income of $10
    7·1 answer
  • Which would you trade on a stock exchange?<br> A) shares<br> B) bonds<br> C) annuities
    12·2 answers
  • A pet shop owner had a parrot with a sign on its cage that said "Parrot repeats everything it hears". Davey bought the parrot an
    12·1 answer
  • A seller or manufacturer has significant legal responsibility to buyers and users of goods and services, as well as to third par
    12·1 answer
  • Which one of the following is the financial statement that summerizes a firms revenue and expenses over a period of time?
    7·1 answer
  • At the end of a long meeting with many new people, four people are overheard having a heated conversation. Isabel and Linda are
    7·1 answer
  • 10. Dixon Construction Company was awarded a contract to construct an interchange at the junction of U.S. 94 and Highway 30 at a
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!