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Helen [10]
3 years ago
15

Assume the spot rate for the British pound currently is £.6369 per $1. Also assume the one-year forward rate is £.6421 per $1. A

risk-free asset in the U.S. is currently earning 3.2 percent. If interest rate parity holds, what rate can you earn on a one-year risk-free British security?
Business
1 answer:
inna [77]3 years ago
5 0

Answer:

4.04%

Explanation:

Using the Interest rate parity formula according to this theory the forward exchange rate of  should be equal to the spot rate multiplied by the interest rate of the domestic country divided by the interest rate of the foreign country so from this formula

F=S*(1+i)/(1+r)

we derive

(1+r)=F/S*(1+i)

1+r =0.6421/0.6369*(1.032)

1+r =1.0404

 r   = 0.0404/4.04%

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Suppose Yamahonda, a Japanese-owned motorcycle manufacturer, builds a production plant in Alabama. This is an example of foreign
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Answer:

The statement is true, as it is an example of foreign direct investment.

Explanation:

Foreign direct investment is the direct investment by individuals or legal persons in production or business operations abroad. In this context, investments include both acquisition of foreign operations and expansion of own operations.  

Foreign direct investment does not include the purchase of either shares or bonds per se. More specifically, the IMF has restricted direct investment on acquisitions to cases where the foreign investor owns 10% or more of the shares that give administrative rights in the business. Investment funds that can be classified as foreign direct investments therefore include equity deposits, reinvestments of dividends from the business, as well as the allocation of short-term and long-term loans between parent companies and subsidiaries.  

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2 years ago
Compute the Cost of Goods Manufactured and Cost of Goods Sold for Strike Marine Company for the most recent year using the amoun
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Answer:

Instructions are below.

Explanation:

<u>First, we need to calculate the direct material used and the manufacturing overhead:</u>

Direct material used= beginning inventory + purchases - ending inventory

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Total overhead= $68,000

<u>Now, we can determine the cost of goods manufactured:</u>

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cost of goods manufactured= 41,000 + 62,000 + 88,000 + 68,000 - 27,000

cost of goods manufactured= 232,000

<u>Finally, the cost of goods sold:</u>

COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory

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2 years ago
The nations of Utopia and Paradise both produce popcorn and cola. They currently do not trade. Below are the Production Possibil
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Answer and explanation:

The following attached files                                                                                                      

give a comprehensive breakdown of  solutions                                                                    

to the questions                                                                                                                      

   

5 0
2 years ago
The manager of a certain division at Alpha Manufacturing is evaluated on how efficiently the division uses equipment, buildings,
kumpel [21]

Answer:

Investment center

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They are accessed according to the amount of money brought into the company through various investments.

In the scenario described above, the manager of a particular section of Alpha manufacturing was evaluated on how the equipments, building and other assets were used to generate profit because they were considered as an investment center.

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A sales associate authorized to negotiate a sale of property has the authority to
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Thus the above response is right.

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