1. Fred, an American businessman based in the U.S., imports fruit from Malaysia. He reads that the U.S. Federal Reserve Bank will raise interest rates two weeks from now. Based on the relationship between interest rates and currency values, is Fred better off importing as much fruit from Malaysia now or should he wait until the U.S. Fed actually raises interest rates before he imports more fruit from Malaysia? Explain your answer.

2. MXN is the symbol for the Mexican Peso. MXN/USD .05. A 2020 Toyota Supra costs $49,000 in the U.S. and 1,200,000 Mexican Pesos in Mexico. Based on this information, please answer the following questions.

1. What is USD/MXP in real currency exchange rate terms?
2. Is the USD over or undervalued?
3. Where am I better off buying the Toyota Supra? In Mexico or in the U.S.?
4. Based on the official/nominal MXN/USD currency exchange rate, what would I expect to pay for the Supra in Mexico?
5. Based on the real cost of the same car in both countries, if Purchasing Power Parity (PPP) were to hold true, what would USD/MXN be?
6. Based on the nominal currency exchange rate, if Purchasing Power Parity (PPP) were to hold true, what would I expect to pay for the Supra in the U.S.

Please explain how you solved each letter for #2. Thank you!

1.

a. On January 2, you sold short 1,000 shares of ABC stock at $25 per share. On March 2, a dividend of $1 per share was paid. On April 2, covered the short sale by buying the stock at a price of $23 per share. You paid $20 in commissions for the roundtrip ($10 to short, $10 to cover). Assuming you have no other positions, what is the value of your account on April 2? Present your answer rounded to the nearest cent in this format, $123.45

b.

What would happen to the divisor of a market-weighted index if one of its constituents did a 2:1 stock split?

a-Nothing

b-Get smaller

c-Get bigger

1. If interest rates increase in South Africa, what will follow? Circle all of the correct responses based on the below option:

1. South Africa’s currency (the Rand) will depreciate in value
2. South Africa will import more than it exports
3. South Africa’s balance of trade position will lead to more of a surplus position
4. Countries that export products to South Africa will be pleased
5. Countries that import products from South Africa will be pleased

2. Australia suddenly experiences more of a balance of trade surplus. What can we attribute this to? Circle all of the correct responses based on the below option:

1. The Australian dollar depreciated in value
2. Interest rates increased in Australia
3. Interest rates decreased in Australia
4. The Australian dollar appreciated in value

3. BRL is the symbol for the Brazilian Real, the name of Brazil’s currency. USD/BRL 4. A Honda CTX700 motorcycle sells for $7,400 in the U.S. Is the Brazilian Real over or undervalued?

Please answer all questions, need to check my answers.

I'm very confused about this whole import & export concept and how it is affected by rising or declining interest rates. If you could please explain it to me I'd really appreciate it

The average annual rate of return for your start up company for the past several years has been 20% and has made you rich. To maintain this growth, you are evaluating two projects: the first to expand the production capacity and the second is open a new office. You have developed the following table to compare the two:

Comparison of projects

   Year       Plant Expansion       New Office       Initial Outlay    3,500,000 500,000 1 1,500,000 250,000 2 2,000,000 350,000 3 2,500,000 375,000 4 2,750,000 425,000

a, What is the total cash flow of each project?

b. What is the traditional payback period of each and which would be selected based on this value?

c. What is the discounted payback period of each and which would be selected based on this value?

d. What is the NPV and which would be selected based on this rate?

e. What is the IRR of each project and which would be selected on this rate?

f. What is the PI of each project of each project and which would be selected on this rate?

g. You can only afford to undertake one project. Which one and why

Smith Enterprises recently was profiled on a financial information website and touted as a "hot" growth stock. You acquired the stock quote shown here from that website.

Smith Enterprises (NASDAQ: SME)
Last Trade:	51.63	Day’s Range:	47.22 – 51.96
Trade Time:	4:00 PM ET	52wk Range:	25.48 – 60.71
One-Day Stock Return:	11.25%	Volume:	1,419,317
Prev. Close:	46.41	Avg. Vol. (3m):	629,072
Open:	47.25	Market Cap:	1.63B
Bid:	N/A	P/E (ttm):	27.02
Ask:	N/A	EPS (ttm):
1y Target Est:	55.40	Div. & Yield:	0.20 (0.40%)

The last trade time is shown to be at 4:00 PM Eastern Time. The abbreviation “ttm” stands for “trailing twelve months,” and the number shown reflects data from the previous 12 months. The abbreviation “3m” reflects data from the previous 3 months.

1. What exchange does Smith Enterprises trade on?

a. SME

b. NASDAQ

c. AMEX

d. DAX

e. FTSE

2. What is Smith’s earnings per share (EPS) for the trailing 12 months?

a. $1.83

b. $1.91

c. $2.14

d. $1.75

e. $2.19

3. How much did the price increase today over yesterday’s closing price?

a. $5.08

b. $5.15

c. $5.57

d. $5.22

e. $5.64

4. How heavy was the trading of Smith’s stock today relative to the normal level of trading?

a. Relatively light trading

b. Average trading

c. Relatively heavy trading

PAYING OFF CREDIT CARDS

Simon recently received a credit card with an 17% nominal interest rate. With the card, he purchased an Apple iPhone 5 for $500. The minimum payment on the card is only $10 per month.

1. If Simon makes the minimum monthly payment and makes no other charges, how many months will it be before he pays off the card? Do not round intermediate calculations. Round your answer to the nearest month.
   ? month(s)

2. If Simon makes monthly payments of $30, how many months will it be before he pays off the debt? Do not round intermediate calculations. Round your answer to the nearest month.
   ? month(s)

3. How much more in total payments will Simon make under the $10-a-month plan than under the $30-a-month plan. Do not round intermediate calculations. Round your answer to the nearest cent.
   $ ?

Avicorp has a

$ 10.3

million debt issue​ outstanding, with a

6.1 %

coupon rate. The debt has​ semi-annual coupons, the next coupon is due in six​ months, and the debt matures in five years. It is currently priced at

94 %

of par value.

a. What is​ Avicorp's pre-tax cost of​ debt? Note: Compute the effective annual return.

b. If Avicorp faces a

40 %

tax​ rate, what is its​ after-tax cost of​ debt?

​Note: Assume that the firm will always be able to utilize its full interest tax shield.

Suppose that you are age 25 today and plan on retiring at age 65. You determined that you need to have saved $659,754 in real dollars by the time you retire. How much must you contribute (in real dollars) each year to your retirement account to achieve your goal? Assume the following:

you make annual contributions;

each contribution is the same amount in real dollars;

the first contribution will be one year from today; your last contribution will be at age 65;

your portfolio earns a real annual rate of return of 4.45%, compounded annually.

Do not round at intermediate steps in your calculation. Round your answer to the nearest dollar. Do not type the $ symbol.

You have a loan for $200,000 at 5% interest over 15 years. In the eighth year you pay off $5000

a)If your payment doesn't change, how much longer until the loan is paid off?

b)if the loan re-amortized, or the maturity date stays the same, what would the new payment be?

Given the popularity of IRR, you have decided to use it to evaluate a project. The cashflows from the project will be $40k, $42k and $28k in years 1 through 3. After that the project will yield cashflows of $20k per year, forever. The project’s initial cost is $450k and the firm’s opportunity cost/hurdle rate is 7%. Write down the equation used to solve for the IRR (do not solve for the actual IRR). Does the project have conventional cashflows?

Inverse mutual funds, sometimes referred to as "bear market" or "short" funds, seek to deliver the opposite of the performance of the index or category they track, and can thus be used by traders to bet against the stock market. This question is based on the following table, which shows the performance of three such funds as of August 12, 2011.

	Year-to-date Loss
SHPIX (Short Smallcap Profund)	6%
RYURX (Rydex Inverse S&P 500)	5%
RYIHX (Rydex Inverse High Yield)	7%

You invested a total of $8,000 in the three funds at the beginning of 2011, including an equal amount in RYURX and RYIHX. Your year-to-date loss from the first two funds amounted to $340. How much did you invest in each of the three funds?

SHPIX	$
RYURX	$
RYIHX	$

You are looking to purchase a $300,000 30 year mortgage at 6.5% a) what is the monthly payment b) if you want to pay it off in year 9, how much do you owe? c) How much interest would you have paid? d) if the lender charged 1.5 points, what is the effective interest if you paid it off in year 9?

Find a news article that discusses raising capital or an IPO, The article should be no more than 12 months old. Summarize the article and analyse the impact on the company the article is choose from.

You’ve been asked to evaluate a project. Your estimates say that the first cashflow of $120k will occur one year from today. You believe the cashflows will increase by 4% per year for 4 additional years. After that point, the cashflows will remain the same for 5 years. The upfront cost to take the project is $950k, and the appropriate discount rate is 6%. What is the project’s NPV?

Please make sure to apply the equation for a perpetuity (c/(r-g)) !

Found some previous answers to this, but only question 7 seems to be corrent. Would really appreciate some help.

RosenBall, ASA expects a cash-equivalent EBIT of 200 million without any growth in the foreseeable future. The firm’s overall cost of capital (the required rate of return on assets) is 10%, the applicable tax-rate is 25%, and there are 200 million shares outstanding. RosenBall’s board of directors are currently looking into the possibility of refinancing the firm by borrowing 900 million at an interest rate of 5% per year. The loan is serviced by paying the annual interest, only. Problem 7 What is currently the all-equity value of RosenBall, ASA? State your answer as a whole number without any decimal points.

Problem 7 What is currently the all-equity value of RosenBall, ASA? State your answer as a whole number in millions without any decimal points.

The correct answer to problem 7 is 1500, this one i figured out.

Problem 8 With corporate taxes, only, what is RosenBall’s market value following the announcement of the refinancing plan? State your answer as a whole number in millions without any decimal points.

Problem 9 With corporate taxes, only, what is RosenBall’s market value per share following the announcement of the refinancing plan? State your answer to two decimal points.

Problem 10 With corporate taxes, only, what is RosenBall’s market value per share when the actual borrowing has taken place? State your answer to two decimal points.