You need to order US $100,000 worth of reams of paper from China to complete an order from an important commercial customer in 30 days. The current rate of exchange is USD/CNY = 6.5766.

• Ignoring other transaction expenses associated with the order, how many Yuan would you need to pay the Chinese supplier?
• Define the meaning of foreign exchange. Assuming that you have the choice to pay immediately or in 30 days, define, describe, and provide examples of how you may use each of the following to complete the transaction:
  • Definition and use of foreign currency derivatives
  • Spot, forward, and futures currency contracts
  • Bid/ask spreads
  • Definition and use of currency options

Purchase of Health Insurance

1) As one looks at historical data in the US from 1950 forward, describe the medical services that have been most commonly covered by health insurance (for the most people, and earliest in history), and those that have been covered less commonly (for fewer people, and later in history).

2) Discuss two economic aspects of the demand for these various services that will help understand the historic trends you described in part 1).

3) Related to question 1) and 2), would you expect more people to purchase insurance against losses associated with dental care or with hospital care? Why?

Trefor, a US firm, has a sterling (£) receivable of £300,000 from a UK customer due one year from now. Trefor has no use for sterling currency and will exchange the receipt into US dollars ($). The spot exchange rate now is £1=$1.34 and the one- year forward exchange rate is £1=$1.31. Assume the forecasted spot rate in one year’s time is £1=$1.28 or £1=$1.38, with equal probability. The discount rate is zero.

0. (a) What is the expected dollar value of Trefor’s receivable if it chooses:

   1. (i) not to hedge the receipt?

   2. (ii) to use a forward hedge?

1. (b) One year sterling put options and sterling call options are available at a cost of

   $0.03 per £ with an exercise price of £1.32.

   1. (i) How could Trefor make use of an option hedge for its sterling receivable?

   2. (ii) What will be the expected value in dollars of the outcome of the option hedge?

2. (c) If Trefor is concerned only about downside risk, is it better to choose the forward hedge or the option hedge? Explain. (60 words)

3. (d) An alternative hedging strategy for Trefor is to use futures contracts. Are there any advantages to using futures instead of a forward exchange extract? Explain. (60 words)

4. (e) Briefly discuss the implications of the Capital Asset Pricing Model for the relationship between the current spot price of an asset and the discount offered by the seller of a futures contract.

I'll give good rating please help.

what are the market growth rates for the Retail pharmaceutical industry from 2015-2019 in the US? Please describe whether they are positive or negative.

3. Trefor, a US firm, has a sterling (£) receivable of £300,000 from a UK customer due one year from now. Trefor has no use for sterling currency and will exchange the receipt into US dollars ($). The spot exchange rate now is £1=$1.34 and the oneyear forward exchange rate is £1=$1.31. Assume the forecasted spot rate in one UL20/0419 Page 5 of 8 year’s time is £1=$1.28 or £1=$1.38, with equal probability. The discount rate is zero. (a) What is the expected dollar value of Trefor’s receivable if it chooses: (i) not to hedge the receipt? (ii) to use a forward hedge? (b) One year sterling put options and sterling call options are available at a cost of $0.03 per £ with an exercise price of £1.32. (i) How could Trefor make use of an option hedge for its sterling receivable? (ii) What will be the expected value in dollars of the outcome of the option hedge? (c) If Trefor is concerned only about downside risk, is it better to choose the forward hedge or the option hedge? Explain. (60 words) (d) An alternative hedging strategy for Trefor is to use futures contracts. Are there any advantages to using futures instead of a forward exchange extract? Explain. (60 words) (e) Briefly discuss the implications of the Capital Asset Pricing Model for the relationship between the current spot price of an asset and the discount offered by the seller of a futures contract. (100 words)

Trefor, a US firm, has a sterling (£) receivable of £300,000 from a UK customer due one year from now. Trefor has no use for sterling currency and will exchange the receipt into US dollars ($). The spot exchange rate now is £1=$1.34 and the oneyear forward exchange rate is £1=$1.31. Assume the forecasted spot rate in one UL20/0419 Page 5 of 8 year’s time is £1=$1.28 or £1=$1.38, with equal probability. The discount rate is zero.

(a) What is the expected dollar value of Trefor’s receivable if it chooses:

(i) not to hedge the receipt?

(ii) to use a forward hedge?

(b) One year sterling put options and sterling call options are available at a cost of $0.03 per £ with an exercise price of £1.32.

(i) How could Trefor make use of an option hedge for its sterling receivable?

(ii) What will be the expected value in dollars of the outcome of the option hedge?

(c) If Trefor is concerned only about downside risk, is it better to choose the forward hedge or the option hedge? Explain. (60 words)

(d) An alternative hedging strategy for Trefor is to use futures contracts. Are there any advantages to using futures instead of a forward exchange extract? Explain. (60 words)

(e) Briefly discuss the implications of the Capital Asset Pricing Model for the relationship between the current spot price of an asset and the discount offered by the seller of a futures contract. (100 words)

Trefor, a US firm, has a sterling (£) receivable of £300,000 from a UK customer due one year from now. Trefor has no use for sterling currency and will exchange the receipt into US dollars ($). The spot exchange rate now is £1=$1.34 and the oneyear forward exchange rate is £1=$1.31. Assume the forecasted spot rate in one year’s time is £1=$1.28 or £1=$1.38, with equal probability. The discount rate is zero.

(a) What is the expected dollar value of Trefor’s receivable if it chooses:

(i) not to hedge the receipt?

(ii) to use a forward hedge?

(b) One year sterling put options and sterling call options are available at a cost of $0.03 per £ with an exercise price of £1.32.

(i) How could Trefor make use of an option hedge for its sterling receivable?

(ii) What will be the expected value in dollars of the outcome of the option hedge?

(c) If Trefor is concerned only about downside risk, is it better to choose the forward hedge or the option hedge? Explain. (60 words)

(d) An alternative hedging strategy for Trefor is to use futures contracts. Are there any advantages to using futures instead of a forward exchange extract? Explain. (60 words)

(e) Briefly discuss the implications of the Capital Asset Pricing Model for the relationship between the current spot price of an asset and the discount offered by the seller of a futures contract. (100 words)

From a random sample of 48 days in a recent year, US Gasoline prices had a mean of $2.34 and a standard deviation of $0.30. Use this information to construct the following confidence intervals and determine the margin of error for each:

a. 90%

b. 95%

c. 99%

Trefor, a US firm, has a sterling (£) receivable of £300,000 from a UK customer due one year from now. Trefor has no use for sterling currency and will exchange the receipt into US dollars ($). The spot exchange rate now is £1=$1.34 and the one-year forward exchange rate is £1=$1.31. Assume the forecasted spot rate in one year’s time is £1=$1.28 or £1=$1.38, with equal probability. The discount rate is zero.

(a) What is the expected dollar value of Trefor’s receivable if it chooses:

(i) not to hedge the receipt?

(ii) to use a forward hedge?

(b) One year sterling put options and sterling call options are available at a cost of $0.03 per £ with an exercise price of £1.32.

(i) How could Trefor make use of an option hedge for its sterling receivable?

(ii) What will be the expected value in dollars of the outcome of the option hedge?

(c) If Trefor is concerned only about downside risk, is it better to choose the forward hedge or the option hedge? Explain. (60 words)

(d) An alternative hedging strategy for Trefor is to use futures contracts. Are there any advantages to using futures instead of a forward exchange extract? Explain. (60 words)

(e) Briefly discuss the implications of the Capital Asset Pricing Model for the relationship between the current spot price of an asset and the discount offered by the seller of a futures contract. (100 words)

Does immigration affect wages and jobs in the US? Are Americans hurt by immigration from countries that offer cheaper labor? Does immigration increase crime and cost the taxpayers money?