Question
In: Finance
GIVEN: 1,000,000 € (EUR, Euro) invest in US w/ current spot XR = US$ 1.18/€ and...
GIVEN: 1,000,000 € (EUR, Euro) invest in US w/ current spot XR = US$ 1.18/€ and 3-month US APR = 2%
1- What is the expected EFFECTIVE Annual Return on the US investment:
2- Convert the Euros, determine the dollar amount after the three months, and translate the dollars back into Euros at a future SPOT rate of XR = US$ 1.12/€:
3-What did the investor earn in Euros for the three month period annualized on a simple interest basis:
4-What did the investor earn in Euros for the three month period annualized on a compound interest basis:
5-Which currency appreciated?
Solutions
jeff jeffy answered 3 years agoRelated Solutions
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1.15 / EUR and the 3-month forward exchange rate is USD $1.10 /
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annum in Germany. Assume that you can borrow EUR 1,000,000 or USD
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Current spot exchange rates (2020) EUR/USA CNY/USA JPY/USA 1.1848 0.1463 0.9418 Current interest rate (2020) EUR...
Current spot exchange rates (2020)
EUR/USA
CNY/USA
JPY/USA
1.1848
0.1463
0.9418
Current interest rate (2020)
EUR
CNY
JPY
USA
0%
3.85%
-0.10%
0.26%
Inflation rate forecasts (2020)
EUR
CNY
JPY
USA
0.27%
3%
0.80%
2.36%
IFE: 1 year forecast
EUR/USA
CNY/USA
JPY/USA
Exchange Rate
PPP: 1 year forecast
EUR/USA
CNY/USA
JPY/USA
Growth rate
Growth + 1
Exchange rate
1 year forward rate
EUR/USA
CNY/USA
JPY/USA
Bid
Ask
Mid point
Expected change in the USA value
EUR/USA
CNY/USA
JPY/USA
IFE
PPP...
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trends? Do a brief research on the internet to support your
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The annual inflation rate in the U.S is expected to be 1.99 percent
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