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Butoxors [25]
3 years ago
5

Assume that interest rate parity holds and that 90-day risk-free securities yield 6% in the United States and 6.5% in Germany. I

n the spot market, 1 euro equals $1.35. What is the 90-day forward rate
Business
1 answer:
Marianna [84]3 years ago
3 0

Answer: 1.356345

Explanation:

Based on the scenario and information provided in the question, the 90-day forward rate will be calculated as:

= Spot Rate × (1 + Germany Interest Rate) / (1 + United States Interest Rate)

= 1.35 × (1 + 6.5%) / (1 + 6%)

= 1.35 × (1 + 0.065) / (1 + 0.06)

= 1.35 × 1.065/1.06

= 1.35 × 1.0047

= 1.356345

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Make creative/funny videos for them to go viral amongst people to repost
4 0
3 years ago
Brown Street Grocers has a cost of equity of 11.8 percent, a pre-tax cost of debt of 6.9 percent, and a tax rate of 35 percent.
Nastasia [14]

Answer:

The correct answer to the following question is option E) 9.06% .

Explanation:

Here the cost of equity given is  - 11.8%

Pre tax cost of debt- 6.9%

Tax rate- 35%

So the after tax cost of debt - 6.9% x 65%

= 4.485%

The debt to equity ratio - .6

So the weight of debt - .6 / ( 1 + .06 )

= .375

Weight of equity - 1 / ( 1 + .06 )

= .625

Weighted average cost of capital =

Debts cost x weight of debt + Equity cost x weight of equity

= 4.485 x .375 + 11.8 x .625

= 1.681875 + 7.735

= 9.06%

7 0
3 years ago
Stealth bank has deposits of $300 million. it holds reserves of $20 million and has purchased government bonds worth $300 millio
ryzh [129]

First let us identify if the asset is a gain or loss. An asset is a gain if it contributes to the banks overall finance while it is a loss if it is a cost directly or indirectly.

Deposits of $300 million = Gain (+)

Reserves of $20 million = Gain (+)

<span>Purchased government bonds worth $300 million = Loss (-)         ---> This entails cost</span>

Selling bank’s loans at current market value of $600 million = Gain (+)

Therefore adding up everything to get the banks net worth:

Stealth banks net worth = $300 M + $20 M - $300 M + $600 M

<span>Stealth banks net worth = $620 million</span>

7 0
3 years ago
nkedIn targets a specific demographic: working professionals. They tend to be older and better educated. Why might advertisers b
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Answer: Recognition from the class of persons that patronize their product

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Linkedln is a site that attracts professionals from different field of study who network amongst themselves, educate each other, share information and jobs for the benefit of others in the same field.

Advertisers might be interested in this group because their target audience are mostly found there. A large mass of individuals use social media now and when many of these professionals want information or persons who can take up roles in openings in their firms they come to linkedln

4 0
3 years ago
A stability strategy is a grand strategy that involves little or no significant organizational change. For example, Love Forever
In-s [12.5K]

Answer:

The correct answer is letter "A": True.

Explanation:

Stability strategies are those in which the firm does not change its core method of working, thus, it remains to focus on its current products and markets. Carrying out stability strategies is a less risky approach. The types of stability strategies can be <em>no-change strategy; profit strategy; </em><u><em>and</em></u><em> growth through concentration, integration, diversification, co-operation, internationalization.</em>

6 0
4 years ago
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