Explore BrainMass

Foreign Exchange Rates

Airbus sale to Delta: guaranteed payments, expected payments

Airbus sold an A400 to Delta Airlines, a U.S. company, and billed $30 million payable in six months. Airbus is concerned about the euro proceeds from international sales and would like to control exchange risk. The current spot exchange rate is $1.05/? and the six-month forward exchange rate is $1.10/?. Airbus can buy a six-m

Hedging Exchange Rate Exposure on Sale of Land

You hold a piece of land in the City of London that you may want to sell in one year. As a U.S. resident, you are concerned with the dollar value of the land. Assume that if the British economy booms in the future, the land will be worth £2,000, and one British pound will be worth $1.40. If the British economy slows down, on th

Exchange rate and risk

The exchange rate between the Japanese yen and the U.S. dollar is 110 yen = 1U.S$. Acme Company has decided to purchase goods for 45 million yen, with payment due in 8 months. How many U.S. dollars would the company need to purchase the merchandise and pay for them today? Has the yen appreciated or depreciated against the

"Are We the Problem?"

In Chapter 8 of Watershed 4: "Are We the Problem?" 1. Is the equation, I=PAT true for all environmental problems. If yes, how? If no, why? Please, support your arguments with two practical examples from the course textbooks. 2. Who proposed this equation? Explain the equation

Analyze disclosures for Johnson & Johnson for Cash and Cash Equivalents

Select a publicly held company to use as the basis for this assignment. Use the Internet to acquire a copy of your selected company's most recent financial statements. Prepare a paper in which you analyze the disclosures contained within the financial statements related to cash and cash equivalents,

Discount, Premium and Exchange Rate: Example Problem

The Wall Street Journal reported the following spot and forward rates for Swiss Franc ($/SF) Spot $0.8202 30-day forward $0.8244 90-day forward $0.8295 180-day forward $0.8343 a) Was the 30 day forward a discount or premium? b) Suppose you executed a 90 day forward contract to exchange 1

Adjusting returns for exchange rates

You are the vice president of finance for the International Resources, Inc. headquartered in Denver, Colorado. In January 2007, your firm's Canadian subsidiary obtained a six-month loan of $100,000 Canadian dollars from a bank in Denver to finance the acquisition of a titanium mine in Quebec province. The loan will also be repai

Stock Investments: Adjusting Returns for Exchange Rates

A French investor buys $100 shares of Goodyear Corp. for $3,000($30 per share). Over the course of a year, the stock goes up 6 points. a. If there is a 10 percent gain in the value of the dollar versus the euro, what will be the total percentage return to the French investor? First determine the new dollar value of the invest

Lee Corporation: Statement of changes in owner's equity

Please see the attachment. Lee Corporation, a U.S. company, began operations on January 1, 2004. During its first 3 years of operations, Lee reported net income and declared dividends as follows. Net income Dividends declared 2004 $ 40,000

Cross rates and Purchasing Power Parity

19-2) Cross Rates: A currency trader observes that in the spot exchange market, 1 U.S. dollar can be exchanged for 4.0828 Israeli shekels or for 111.23 Japanese yen. What is the cross exchange rate between the yen and shekels; that is, how many yen would you receive for every shekel exchanged? 19-4) Purchasing power parity:

An introduction

A 250 word introduction to a paper title international finance. The paper is about the Wendy,s corporation and these topices a. How the global investment banking process has assisted the organization. b. How regulatory bodies affect financial decision-making c. Identify and evaluate contemporary issues

Foreign Currency and Nike Case Study

Since Nike has international business in numerous countries, it closely monitors exchange rate movements. In particular, Nike has major business in Japan and in the United Kingdom. It has even begun to sell its shoes in Eastern European countries. Nike recognizes that it must monitor movements in currencies that were not allowed

Fisher Effect Mechanics & Exchange Rate Fluctuations

Please provide me assistance with an explanation of the Fisher effect, its mechanics, and how it can be applied in the hypothetical situation below. Also please explain how implications of exchange rate fluctuations as they relate to marketing and production decisions. You are asked to help put together a training program des

Gandor Company: should the company participate in joint venture with Chinese firm?

Gandor Co. is a U.S. firm that is considering a joint venture with a Chinese firm to produce and sell videocassettes. Gandor will invest $12 million in this project which will help to finance the Chinese firm's production. For each of the first 3 years, 50 percent of total profits will be distributed to the Chinese firm, while t

Correct Exchange Rate Needed for Translation

Please explain what exchange rate is and the correct rate to use for translating the trial balance in this problem from the foreign currency to U.S. currency. Am I to assume that since the trial balance is year end that I would use only the year end rate of Nkr 0.20 for all of the amounts listed or am I do use different exchange

What is meant by foreign exchange risk?

What is meant by foreign exchange risk? What specific problems does foreign exchange present in an organization? How could an organization needing Euros in six months protect itself from currency fluctuations?

Hypothetically, what is the theoretical future price of EUR:USD, which will mature in 2 yrs in the future? Now suppose the EUR:USD future contract mature in 2 yrs is currently traded at 1.45:1 in futures market, what should you do to arbitrage?

Suppose you are trading Forex (Foreign exchange) now, and the spot price is EUR:USD=1.40:1. The risk free rate of EUR is 3% while risk free rate of USD is 1% (a) Hypothetically, what is the theoretical future price of EUR:USD, which will mature in 2 yrs in the future? (b) Now suppose the EUR:USD future contract mature in

Pitnner's Nokia stock value

1. Mrs Pitnner owns 100 shares of stock in Nokia valued at 16.5 euros per share. What is the value (in U.S dollars) of Mrs Pitnner's shares of stock when the exchange rate a. .9188 yen = 1$ b. 70 yen = 1$ c. 1.212 yen =1$ 2. John is planning on purchasing his dream car directly from the manufacturer in Germany. In order

US and Canada Spot and Forex Rates

The spot exchange rate for the Canadian dollar is Can $1.26 and the 6month forward rate is Can $1.22. Which is worth more, the U.S. Dollar, or the Canadian Dollar? Assuming absolute PPP holds, what is the cost in the U.S. of an Elkhead Beer if the price in Canada is Can $2.19? Why might the beer actually sell at a differe

Managing Economic and Transaction Exposure

Managing Economic and Transaction Exposure Simulation A summary in which you address the following: 1. For each major phase, describe the situation, your recommended solutions, and results. 2. Summarize different global finance concepts addressed in the simulation by answering the following questions: 3. What f

Global Financing and Exchange Rate Mechanisms

Prepare a 800-1,000-word paper in which you analyze one of the following global financing and exchange rate topics: 1) Purchasing Power Parity/"Big Mac Index" Select a particular country, and a particular industry, Describe Purchasing Power Parity/"Big Mac Index", how it is used in global financing operations, and its impo

Study analysis of the Blades, Inc.

See attached file for full problem. Prepare a case study analysis of the Blades, Inc. 1. Explain factors that affect foreign exchange rates. 2. Summarize the case and answer questions 1-6.

Foreign Exchange and Derivatives Markets

I need help on this assignment. I have to answers the following questions based on a chosen senario. The selected scenario is : A manufacturing organization considering expansion to India or Brazil 1. What are implications of the absence or presence of a forward exchange market? 2. Does interest rate parity hold? Wh