Question 18
If the interest rate on euro-denominated assets is 13 percent and it is 15 percent on peso-denominated assets, and if the euro is expected to appreciate at a 4 percent rate against peso, for Manuel the Mexican the expected rate of return on euro-denominated assets is _______%
Question 19
According to the purchasing power parity theory, a rise in the United States price level of 5 percent, and a rise in the Mexican price level of 6 percent cause the dollar to appreciate by _______% (put a negative sign if it depreciates) relative to the peso.
In: Economics
Suppose that the treasurer of Apple has an extra cash reserve of $200,000,000 to invest for six months. The six-month interest rate is 4 percent per annum in the United States and 3 percent per annum in France. Currently, the spot exchange rate is €1.00 per dollar and the six-month forward exchange rate is €0.98 per dollar. The treasurer of Apple does not wish to bear any exchange risk. Where should he/she invest to maximize the return?
In: Finance
Assume that interest rate parity holds and that 90-day risk-free securities yield 4% in the United States and 4.5% in Germany. In the spot market, 1 euro equals $1.35.
What is the 90-day forward rate? Do not round intermediate calculations. Round your answer to four decimal places.
$
Is the 90-day forward rate trading at a premium or discount relative to the spot rate?
The 90-day forward rate is trading at a -Select-premiumdiscountItem 2 relative to the spot rate.
In: Finance
Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 20 years to maturity, and a coupon rate of 6.2 percent paid annually. If the yield to maturity is 7.3 percent, what is the current price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
In: Finance
You are an economic advisor to Australia’s Prime Minister. Australia is an open economy with free capital mobility. The P.M. wishes to know why he can’t maintain a fixed exchange rate with the United States and at the same time reducing interest rates in Australia to fight a recession.
Explain why the P.M. can’t have both a fixed exchange rate an independent interest rate policy at the same time. (Use either uncovered interest parity or an FX market graph in your answer)
In: Economics
Analyze the importance of the enactment of the Health Insurance Portability and Accountability Act (HIPAA), and appraise the overall impact of HIPAA on patients’ medical records. Suggest key ways in which health care administrations may improve data and information quality, and decrease data and information errors. Provide at least one (1) example to support your response.
Differentiate the variations between licensures, certification, measures and accreditation, why it is significant to health care in the United States, and what the role of the Joint Commission is.
In: Operations Management
9.Which statement is FALSE about changing the unit of payment?
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More aggregate units of payment tend to shift financial risk to providers of care. |
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The more aggregated the unit of payment, the less predictable the quantity tends to be. |
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In Germany was introduced global budgeting, called expenditure caps, for physician payment. |
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It’s difficult to isolate the specific effects of changing the unit of payment. |
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In the United States, the Medicare program adopted a less- stringent version of an expenditure cap for physician fees, known as the “sustainable growth rate”. |
In: Economics
In a survey of 3005 adults aged 57 through 85 years, it was found that 81.7% of them used at least one prescription medication (based on data from “Use of Prescription and Over-the-Counter Medications and Dietary Supplements Among Older Adults in the United States,” by Qato et al., Journal of the American Medical Association, Vol. 300, No. 24). Use a 0.01 significance level to test the claim that more than 3/4 of adults use at least one prescription medication.
In: Statistics and Probability
Explain clearly the concept of price discrimination and how this possibility could cause a firm to engage in dumping in an export market (you will have to define dumping also). How is this behavior profitable for the firm? Does the importing country gain or lose welfare because of this dumping? Explain the process by which the United States (as the importer) decides whether to react with an anti-dumping tariff and whether this can raise domestic welfare. Why do many such cases get withdrawn before an actual tariff is imposed?
In: Economics
Blackwater Spring and Metal utilizes the same computerized spring-forming machinery in its U.S. and Malaysian plants. The first cost was $750,000 with S = $150,000 after n = 10 years. MACRS (Modified Accelerated Cost Recovery System) depreciation with n = 5 years is applied in the United States, and standard SL depreciation with n = 10 years is used by the Malaysian facility. If the equipment is sold after 6 years for $100,000, calculate the over-and underdepreciation amounts for each method.
In: Economics