Question
In: Finance
Suppose you are given the following information: Ft($/¥)(3 month; 90 days) = $0.0098 St($/¥) = $0.0095...
- Suppose you are given the following information:
Ft($/¥)(3 month; 90 days) = $0.0098
St($/¥) = $0.0095
it=0.04 (the annualized 3 month T-bill rate in the U.S.)
it*=0.03 (the annualized 3 month T-bill rate in Japan)
- Is there a covered interest arbitrage opportunity? Explain.
Check: (1+i)
Compare: (1+i*)FS
- Start by borrowing either $1,000,000 or ¥1,000,000 (only one of these is the correct currency. If you showed above that profits could be made by borrowing dollars, start by borrowing dollars. Conversely if you showed that a profit could be made by borrowing yen, start by borrowing yen). Show exactly how much profit could be made using the information in a, if an arbitrage opportunity actually existed (if one doesn’t, simply state that there is no arbitrage opportunity).
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Suppose you are given the following information: Ft($/¥)(3 month; 90 days) = $0.0098 St($/¥) = $0.0095...
Suppose you are given the following information:
Ft($/¥)(3 month; 90 days) = $0.0098 St($/¥) = $0.0095 it =0.04
(the annualized 3 month T-bill rate in the U.S.) it*=0.03 (the
annualized 3 month T-bill rate in Japan)
Is there a covered interest arbitrage opportunity? Explain.
Check: (1+i ̃)
Compare: (1+i ̃^*)F/S
You see the following quotes: St = $1.2050/£, Ft+6 = $1.2100/£, i£ = 4%, and i$...
You see the following quotes: St = $1.2050/£, Ft+6 = $1.2100/£,
i£ = 4%, and i$ = 3%.
(a) Do these rates offer covered interest arbitrage
opportunity?
(b) If yes, which way the arbitrage capital move? Calculate the
arbitrage profit.
Suppose you are given the following partially complete table for the coming month. You have a...
Suppose you are given the following partially complete table for
the coming month. You have a meeting with the chief financial
officer in fifteen minutes and he is expecting this information in
its entirety. Note: all labor units are paid equally and labor is
the firm’s only variable input.
a)
Labor
Q
Fixed Cost
Variable Cost
Total Cost
0
0
$0
1
5,500
2
8,500
3
9,000
4
9,200
$1,000
5
9,000
$1,250
b) Suppose the marginal resource...
Suppose you are given the following partially complete table for the coming month. You have a...
Suppose you are given the following partially complete table
for the coming month. You have a meeting with the chief financial
officer in fifteen minutes and he is expecting this completed
information. Note: Labor units are evenly and equally paid. The
only varible input is labor.
Labor Q Fixed Cost Variable Cost Total Cost
_________________________________________________________________
0 0 ______ $0 ______
1 5,500 ______ ______ ______
2 8,500 ______ ______ ______
3 9,000 ______ ______ ______
4 9,200 ______ $1,000...
You are given the following information about Silk Company's inventory for the month of April....
You are given the following information about Silk Company's
inventory for the month of April.
Purchase
Sales
Date
Units
Cost per unit $
Date
Units
April 1
400
4.00
April 2
300
April 10
1,300
4.10
April 11
1,000
April 25
1,200
4.50
April 29
1,400
April 27
600
4.75
Instruction: Silk uses weighted average perpetual.
(a). Calculate the cost of ending inventory and
cost of goods sold. (Note: Round the weighted average cost per unit
to two decimal...
Question 3: (22 points) Suppose you are given the following information about a particular industry: Q^d=...
Question 3: (22 points)
Suppose you are given the following information about a
particular industry:
Q^d= 1600 –
150P
Market demand
Q^s=
250P
Short run market Supply
The Firm total cost function consists of a Fixed Cost of 45 and
a Variable Cost of (q^2)/5
Assume that all firms are identical in a market that is
perfectly competitive.
(1 point) Correctly write the Firm total cost function
(4 point) Using the demand and supply curves for this industry,
find the...
4. Suppose you are given the following partially complete table for the coming month. You have...
4. Suppose you are given the following partially complete table
for the coming month. You have a meeting with the chief financial
officer in fifteen minutes and he is expecting this information in
its entirety. Note: all labor units are paid equally and labor is
the firm’s only variable input.
a)
Labor
Q
Fixed Cost
Variable Cost
Total Cost
0
0
$0
1
5,500
2
8,500
3
9,000
4
9,200
$1,000
5
9,000
$1,250
b) Suppose the marginal...
Q 7. You are given the following information about Silk Company's inventory for the month of...
Q 7. You are given the following
information about Silk Company's inventory for the month of
April.
Purchase
Sales
Date
Units
Cost per unit $
Date
Units
April 1
400
4.00
April 2
300
April 10
1,300
4.10
April 11
1,000
April 25
1,200
4.50
April 29
1,400
April 27
600
4.75
Instruction: Silk uses weighted average perpetual.
(a). Calculate the cost of ending inventory and
cost of goods sold. (Note: Round the weighted average cost per unit
to two...
A supply chain has the following information: Supplier Factory Wholesale Retailer Inventory in days* 30 90...
A supply chain has the following information:
Supplier
Factory
Wholesale
Retailer
Inventory in days*
30
90
40
20
Accounts receivable in days
20
45
30
40
Accounts payable in days
30
45
60
37
Sourcing unit cost
$5
$20
$55
$70
Added unit cost
$10
$25
$10
$30
Sales unit price
$20
$55
$70
$110
On-time delivery (%)
85
95
75
95
*This is also the throughput time in days.
Which entities in the supply chain have the worst performance...
St. Mark’s Hospital contains 520 beds. The occupancy rate varies between 60% and 90% per month,...
St. Mark’s Hospital contains 520 beds. The occupancy rate varies
between 60% and 90% per month, but the average occupancy rate is
generally 80%. In other words, on average, 80% of the hospital’s
beds are occupied by patients. At this level of occupancy, the
hospital’s operating costs are $39 per occupied bed per day,
assuming a 30-day month. This $39 figure contains both variable and
fixed cost elements. This average cost figure drops to $36 when the
occupancy rate is...
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