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question is not clear please send clear question
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Aperson with better financial ability would have a less perceived value than someone with lesser financial ability. For example, a celebrity could buy a piece of clothing (jeans,shirts, jackets, etc.) for $100 and it would be nothing to them. But to someone working a regular 9 to 5 job, that would be an excessive amount of money to spend on one piece of clothing.
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Since the investor is from the US and purchases a hotel in Swiss Alps for CHF 35,000,000, the investor will have to pay interest in the currency CHF.
In order to hedge the currency risk the investor can go for SWAPS where he will recieve the interest in CHF and pay in USD.
Cash flow:
Notional amount = $35,000,000
exchange rate = CHF 1 / USD
Bid price is 5.25% for CHF hence when an investor goes into swap contract then he will get 5.25%. Similarly for USD when investor pays in USD then he will have to pay the ask rate of 8.85%.
The investor will pay 8.85% interest rate in USD and get the 5.25% interest rate in CHF. This interest can be used to pay the interest on loan
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Explanation:
When Leverett's exports became less popular, its savings, Y-C-G does not change. Reason being that, it is assumed that Y depends on the amount of capital and labour, consumption depends only on disposable income and government spending is a fixed extrinsic variable.
Since investment depends on interest rate, and Leverett is a small open economy that takes the interest rate as given, thus investment also does not change . Neither does net export change (This is shown by the S-I curve in the attachment).
The decreased popularity of Leverett's exports leads to an inward shift of the net export curve inward. At the new equilibrium,net exports remains unchanged, though the currency has depreciated.
Leverett's trade balance remained the same, despite the fact that its exports are less popular, this is due to the fact that the depreciated currency provides a stimulus to net exports which overcomes the unpopularity of its exports by making them cheaper.
b. Leverett's currency now buys less foreign currency, thus traveling abroad becomes more expensive. This is an instance showing that imports (including foreign travel) have become more expensive- as required to keep net exports unchanged in the case of decreased demand for exports.
Developing a project charter involves working with stakeholders to create the document that formally authorizes a project.
By creating this document it gives managers the ability to organize resources and workers for the project and all activities within it. A charter grants rights, power, privileges to an individual, corporation, city and other organizations for work on a project.
