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Korolek [52]
2 years ago
14

Suppose the U.S. yield curve is flat at 3% and the euro yield curve is flat at 5%. The current exchange rate is $1.4 per euro. W

hat will be the swap rate on an agreement to exchange currency over a 3-year period
Business
1 answer:
Kruka [31]2 years ago
3 0

Answer: hello your question is incomplete attached below is the complete question.

answer :

3.02 million,    2.96 million,    2.91 million

Explanation:

<u>Determine the swap rate over a 3-year period</u>

swap rate = forward exchange rate * exchange amount

For year 1

1.4 * ( 1 + 0.03 / 1 + 0.05 ) * 2.2 million

= 1.4 ( 0.98095 ) * 2.2

= 3.02 million

For year 2

1.4 * ( 1 + 0.03 / 1 + 0.05 )^2 * 2..2 million

= 1.4 ( 0.98095 )^2 * 2.2 million

= 2.96378 million

For year 3

1.4 * ( 1 + 0.03 / 1 + 0.05 )^3 * 2.2 million

= 1.4 ( 0.98095 )^3 * 2.2 million

= 2.90733 million  

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7 0
3 years ago
1. The Statute of Frauds prevents the enforcement of a(n) ______ contract, which is a contract in which the parties have not ___
icang [17]

Answer:

The correct answers in order are:

Executory  

Fulfilled their obligations  

Not illegal

Explanation:

The Statute of Frauds prevents the enforcement of an executory contract, which is a contract in which the parties have not fulfilled their obligations. These contracts are not illegal.

4 0
3 years ago
Lester lent money to The Corner Store by purchasing bonds issued by the store. The rate of return that he and the other lenders
Alexxx [7]

Answer:

The correct answer is letter "E": cost of debt.

Explanation:

The cost of debt is the interest a company pays on its borrowings. It is expressed as a percentage rate. Also, the cost of debt can be calculated as a before-tax rate or an after-tax rate. Before interest is deductible for income taxes, the cost of debt is usually expressed as an after-tax rate.

7 0
3 years ago
If equilibrium GDP is $250 billion less than the targeted level of GDP, and the Multiplier Model has an mpe of 0.75, then we can
Olegator [25]

Answer:

c. increasing; $62.5

Explanation:

The computation is shown below;

As we know that

Multiplier = 1 ÷ 1 - MPC

= 1 ÷ 1 - 0.75

= 1 ÷ 0.25

= 4

Now if the equilibrium GDP is $250 billion less than the expected level of GDP

So, the government spending would be increased by

= $250 billion ÷ 4

= $62.5

Hence, the correct option is c.

3 0
3 years ago
Departmental Overhead Rates Lansing, Inc., provided the following data for its two producing departments:
QveST [7]

Answer and Explanation:

The computation is shown below:

1. Overhead rates

For Molding Deptt

= Total Estimated overhead ÷ Total Machine hours

= $400,000 ÷ 5,000

= $80 per machine hour

For Polishing Deptt

= Total Estimated overhead ÷ Total Labor hours

= $80,000 ÷ 20,000

= $4 per machine hour

2. Overheads assigned to Form A is

= (80 × 3500) + (4 × 5000)

= $300,000

Overheads assigned to Form B is

= (80 × 1500) + (4 × 15000)

= $180,000

Now

Overhead cost per unit

Form A = $300,000 ÷ 30,000 = $10 per unit

Form B = $180,000 ÷ 50,000 = $3.6 per unit

4 0
3 years ago
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