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xz_007 [3.2K]
3 years ago
12

What is the expected dollar rate of return on dollar deposits with today's exchange rate at $1.10 per euro, next year's expected

exchange rate at $1.165 per euro, the dollar interest rate at 10%, and the euro interest rate at 5%
Business
1 answer:
allsm [11]3 years ago
4 0

Answer:

B. 11%

Explanation:

Recall that

Dollar return on euros = Euro interest rate + [(current exchange rate per euro - initial exchange rate per euro) ÷ initial exchange rate per euro]

Given that

Euro interest rate = 0.05 or 5%

Initial exchange rate = 1.10

Current exchange rate = 1.165

Therefore

Dollar return on Euros = 0.05 + [(1.165 - 1.10) ÷ 1.10]

= 0.05 + [0.065 ÷ 1.10]

= 0.05 + 0.059

= 0.109

OR

= 10.9 %

= 11%

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Answer:

(a) BJ = AJ

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8 0
3 years ago
Why are the real income levels of Americans affected by rising prices?
Nat2105 [25]

"Real Wages" are wages that are adjusted for inflation and rising prices. As prices rise, people are able to buy less and less with their "nominal" (aka un-adjusted)  wages.

One example is gas for your car. If you make $1000 a month and gas goes up from $2.50 to $3, your un-adjusted wages stay the same (you still make $1000) but you can't buy as much of other things because your "real" wages have effectively gone down due to the price increase of gas.

4 0
3 years ago
The equipment necessary for a 4 year project will cost $3,300,000 and can be sold for $650,000 at the end of the project. The as
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Answer: $618,096

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= 650,000 - 570,240

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6 0
3 years ago
The capital accounts of Hawk and Martin have balances of $160,000 and $140,000, respectively, on January 1, the beginning of the
Serhud [2]

Answer:

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Explanation:

8 0
3 years ago
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Answer:

the net realizable value of accounts receivable $56.300

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8 0
3 years ago
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