Consider the supply and the dam and of product Z:

Assume a speculator anticipates that the spot rate of the franc in three months will be lower than today’s three-month forward r

Oksi-84 [34.3K]

Answer:

Assume a speculator anticipates that the spot rate of the franc in three months will be lower than today’s three-month forward rate of the franc, .

a. The speculator can use $1 million to speculate in the forward market by purchasing a forward contract for 2,000,000 francs to be paid out in three months. This helps the speculator avoid losing money as the exchange rate decreases in period of three months.

b. Suppose the franc’s spot rate in three months is $0.40:

This means that the dollar is expected to appreciate in three months because its current rate is. It would take fewer dollars to purchase one franc in three months. The demand for dollars would increase because speculators looking to make a profit would hold as many dollars as possible while waiting for the currency to appreciate, then sell it for more than they purchased it for.

Hence, the speculator could make a profit of $0.10 on each franc.

Suppose the franc’s spot rate in three months is $0.60:

This means that the dollar is expected to depreciate in three months because its current rate is. It would take more dollars to purchase one franc in three months. The demand for dollars would decrease because speculators are expecting the currency’s value to fall in the coming three months.

The speculator would suffer a loss of $0.10 on each franc.

Suppose the franc’s spot rate in three months is $0.50:

This means that the value of the dollar is expected stay the same because its current rate is. It would take the same amount of dollars to purchase one franc in three months. The demand for dollars would remain constant.

The speculator would earn no profit no loss when the Franc’s spot rate in 3 months is $0.50.

Explanation:

7 0

3 years ago

Along a straight line downward sloping demand curve, elasticity is Constant but its value cannot be determined without measureme

N76 [4]

Answer:

(A) Constant and equal to an absolute value of one

Explanation:

The elasticity is diverse at each point on a demand curve with a consistent slope. The reason is that the "slope and elasticity" are various ideas. Incline estimates the steepness or evenness of a line as far as the estimation units for cost and amount. Elasticity determines the general reaction of the number of changes in price. Elasticity is diverse for each section on the interest bend. Although the slant is steady for this straight-line request bend, Elasticity is NOT.

4 0

3 years ago

Equipment was purchased for $145500. Freight charges amounted to $6500 and there was a cost of $12000 for building a foundation

andrey2020 [161]

Answer:

$26800

Explanation:

Total cost to be capitalized for the assets

= 145500 + 6500 +12000

= $164000

Estimated useful life = 5 years

Salvage value = $30000

Using the straight-line method,

Annual Depreciation = (Cost - Salvage value)/ Number of years

= (164000 - 30000)/5

= 134000/5

= $26800

7 0

3 years ago

The wage rate is $10 per hour and the last worker hired by the firm increased output by 100 units. Computers rent for $100 per h

const2013 [10]

Answer:

To minimise cost, the firm should lay off worker and rent more computer as it give more output per dollar invested on it. This reduce the fixed cost of the company drastically and increase the production of the company. The marginal cost of production and marginal revenue are economic parameter, which help to determine the amount of output and price per unit of input that will maximise the profits. The point at which marginal revenue is equal to marginal cost maximise the profit.

5 0

3 years ago

Which of the following from the institutional view is true about the two essential dimensions of organization? a. The technical

____ [38]

Answer:

The institutional structure is that part of the organization most visible to the outside public

Explanation:

An organization ecosystem is defined simply as a system formed by the relationship or interactions of a community of organizations and their environment.

Organizational niche:

is simply an area, region or domain of unique environmental resources and needs.

An Organization is simply defined as a body or and entity that have clear inside/ outside boundary that work towards an explicit aims.

The institutional view is of the notion that when an organizational field is just getting started, diversity is the norm, but later there is a push for similarity.

4 0

3 years ago