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arsen [322]
3 years ago
15

A currency speculator expects the spot rate of British Pounds (GBP) to change from $2.00 to $2.20 in 6-months. Assume the specul

ator has access to credit lines of USD 20,000,000 in the US and GBP 10,000,000 in UK. The annual borrowing and lending rates are 6 percent in US and 4 percent in UK. In order for the speculator to take advantage from the expected spot rate change in GBP, it should
Business
1 answer:
Vedmedyk [2.9K]3 years ago
5 0

Answer:

Borrow in dollars then at spot rate convert money to british pound. Invest in the pounds for half a year and convert back to dollars.

Explanation:

Access to credit = $20000000

We do a conversion to pounds

= 20000000/2

= £10000000

When this is invested for 6 months

10000000 x 1 +4% x6/12

= 10000000(1+0.04*0.5)

= 10000000x1.02

= 10200000

We then make a conversion back to dollars

10200000 x 2.2

= 22,440,000 dollars

Loan to be repaid

20000000(1+6%x6/12)

= 20000000 x 1 +0.06*0.5

= 20000000 x 1.03

= 20,600,000

Then arbitrage profit = 22440000 - 20600000

= 1840000

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ra1l [238]

Answer:

Increased turnover

Explanation:

Turnover is simply any permanent movement or departure of employees beyond organizational boundaries that has being set.

Types of Turnover includes;

1. Functional vs Dysfunctional

2. Voluntary vs Involuntary

3.Controllable vs Uncontrollable

An Increases in turnover will cause;

1.The retention costs fall (individuals are leaving so costs of retaining them fall)

2. The Turnover costs increase as more people are leaving.

7 0
3 years ago
Which of the following is an example of a functional structure? Multiple Choice Fred owns a diner and has three employees. Borro
sweet [91]

Answer: At Mark’s Furniture, all the carpenters are in one group, and all the upholsterers are in another.

Explanation:

Functional structures refer to the grouping of company departments based on what the labor involved do for the company i.e. their functional expertise.

Mark's company is therefore using a functional structure because it groups its workforce by their functional expertise with carpenters in one group and upholsters in another.

Most companies follow this strategy which is why companies have departments such as accounting, human resources, marketing and production.

6 0
3 years ago
An investmetn adviser will always be considered to have taken custody if an adviser: is the trustee for the cleint in a trust ac
Talja [164]

Answer:

true (A.  is the trustee for the client in a trust account)

Explanation:

Based on the information provided within the question it can be said that this statement is completely true. This is mainly due to the fact that a trustee can directly deduct management fees from the customer funds. Therefore if the investment adviser is the trustee for the client he is able to have custody over the account and make these deductions.

3 0
3 years ago
Why is it important to demonstrate a positive work attitude in the workplace?
Anna11 [10]

Answer:

To be seen as trustworthy and reliable

Explanation:

Cause in a working environment, you want to be known as a trustworthy, and reliable worker. Which allows you to have much more career possibilitties.

3 0
3 years ago
Read 2 more answers
GDP has grown in a country at 3% per year for the last 20 years. The labor force has grown at 2% per year and the quantity of ph
professor190 [17]

Answer:

0.6 or 60%

Explanation:

The country's productivity has grown at = 3% - 2% = 1%

Physical capital per worker has grown at = 4% - 2% = 2%

How much has growing physical capital per worker contributed to productivity growth in this country?

productivity increase per 1% of increase in physical capital per worker x growth rate of physical capital per worker = 0.3 x 2% = 0.6%

0.6% / country productivity growth = 0.6% / 1% = 0.6 or 60%

4 0
4 years ago
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