1.a. One unit of Indian Rupees is worth US $0.0210, and a Euro is worth US$1.2785. What...

1.a. One unit of Indian Rupees is worth US $0.0210, and a Euro is worth US$1.2785. What is the value of the Rupees in Euro (i.e., how many Euro you can buy with one unit of Rupees)?

b. You take a one year long position in a forward FX contract on Euro at a forward rate of $1.2195/Euro. The contract amount is 50 million Euro. If the spot FX rate for the yen a year from now is $1.2087/Euro, what is the US dollar gain (loss) on the long forward position on Euro?

Expert Solution

ekkarill92 answered 2 years ago

1. If the exchange rate is such that $1 equals 5 Indian rupees, then the price...

1. If the exchange rate is such that $1 equals 5 Indian rupees, then the price of a rupee is Select one: A. $5. B. $1. C. $0.40. D. $0.20. 2. Arguments in support of protectionism (and against free trade) include all of the following EXCEPT Select one: A. new and troubled industries need to be protected until they acquire sufficient strength to compete equally against their foreign counterparts. B. jobs at home should be protected from cheap foreign labor....

You are considering an investment in Pakistan. One dollar is currently worth 59 Pakistani rupees. An...

You are considering an investment in Pakistan. One dollar is currently worth 59 Pakistani rupees. An investment of 100 million rupees would generate a cash flow of 20 million rupees per year for 20 years. Assume that the beta of this project with the US market is .60, and assume that the risk free rate in the US is 4%, and the market premium in the US is 7%. a. what is the NPV of this project? b. what problems...

QUESTION 1 Suppose the euro was worth $1.25 in 2016. In 2017, a dollar was worth...

QUESTION 1 Suppose the euro was worth $1.25 in 2016. In 2017, a dollar was worth .90 pounds. Find the percentage appreciation/depreciation of the dollar from the British point of view. A) -.1250 B) .1111 C) -.1111 D) .1250 QUESTION 2 2/17 2/18 2/19 £.8/$ $1.30/£ £.9/$ ¥125/$ ¥122/$ $.007/¥ €1.1/$ €/$.85 $.95/€ What is the percentage appreciation/depreciation of the Euro from the US point of view from 2/17 to 2/18? Round intermediate steps and your final answer to four...

The Indian subsidiary of BDC, a US multinational, has the opportunity to invest in one of...

The Indian subsidiary of BDC, a US multinational, has the opportunity to invest in one of two mutually exclusive machines. Both machines can produce the same product for the Indian market. Machine A has a life of 9 years, costs 120 million Indian Rupees (IRP) and will produce after-tax inflows of 2.5 million IRP per year at the end of each year. Machine B has a life of 7 years, costs 150 million and will produce after-tax inflows of 3.5...

1. Suppose the exchange rate between US$ and Euro, US$ and Japanese Yen are: 1...

1. Suppose the exchange rate between US$ and Euro, US$ and Japanese Yen are: 1 US$ = 2 Euro; 1 US$ = 100 Yen. Suppose the interest rates published by central banks in the U.S., Euro zone, and Japan are 2%, 3%, and 4%, respectively; And, suppose the inflation rates in the U.S., Eurozone, and Japan are 1%, 2%, and 1%, respectively. Therefore, (calculation formula is optional) Q1.1: How much Yen can 1 Euro exchange for?...

An Australian importer has received goods from India and will pay 2 million Indian rupees (INR)...

An Australian importer has received goods from India and will pay 2 million Indian rupees (INR) in one year. The importer expects that the value of the INR will appreciate by 20.57% against the Australian dollar from today’s spot rate of 0.2527 in one year. How much Australian dollar the importer will make a loss due to appreciation of INR after one year? (enter the whole number with no sign or symbol)

Trendsetter has just purchased a consignment of skins from Amulta Limited for 100 million Indian Rupees...

Trendsetter has just purchased a consignment of skins from Amulta Limited for 100 million Indian Rupees and the payment is due in 6 months time. The currency risk of this purchase is of particular concern to Trendsetter plc.. The following data has been compiled: Spot exchange rate Rupees 90/£ Forward rate (6 months) Rupees 95/£ UK borrowing rate 5.00% p.a UK investment rate 4.00% p.a. Indian borrowing rate 7.5% p.a Indian investment rate 6.5% p.a Call option exercise price Rupees...

1. Mumbai Ltd. is an Indian company; they are in the process of raising a US...

1. Mumbai Ltd. is an Indian company; they are in the process of raising a US dollar loan and are negotiating rates with City Bank. The Company has been offered a fixed rate of 7% p.a with a proviso that should they opt for a floating rate, the interest rate is likely to be linked to the benchmark rate of 60 basis points over the 10 years US T Bill Rate, with interest reification on a three-monthly basis. The expectations...

Suppose the three-month forward rate for the Indian rupees (INR) per Japanese yen (JPY) was INR 0.75/JPY

Suppose the three-month forward rate for the Indian rupees (INR) per Japanese yen (JPY) was INR 0.75/JPY, while the spot rate at the time was INR 0.73/JPY. A scientist located in New York speculates that the spot rate three months later will be INR 0.77/JPY. They decided to devote 500,000 yen in order to try to profit from this speculation, by making a trade in the forward market.Describe the cash flows and the profit if the prediction comes true (Specify...

Shown below are exchange rates for several currencies. US$ per 1 euro US$ per 1 franc...

Shown below are exchange rates for several currencies. US$ per 1 euro US$ per 1 franc Mexican peso per US$1 Spot rate 1.21 1.03 19.68 30-day forward rate 1.19 1.06 20.15 60-day forward rate 1.15 1.07 21.28 A U.S. company purchases goods from several foreign companies with payment due in euros, francs, and pesos. Would the company be better off paying any of the suppliers now or should it wait 60 days? Why?

Question