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International Finance

Six-month T-Bills have a nominal rate of 7%, while default-free Japanese bonds that mature in 6 months have a nominal rate of 5.5%. In the spot exchange market, 1 yen equals $0.009. If interest rate parity holds, what is the 6-month forward exchange rate?

Six-month T-Bills have a nominal rate of 7%, while default-free Japanese bonds that mature in 6 months have a nominal rate of 5.5%. In the spot exchange market, 1 yen equals $0.009. If interest rate parity holds, what is the 6-month forward exchange rate?

Ethics article analysis: financial officers

Ethics Article Analysis Need help in preparing an analysis of the attached article in which I address the following items: a. Discuss how ethics affects the financial decision-making process. b. Explain the ethics considerations involved in the financial decision-making outlined in your article. c. Identify the financi

Using Accounting Relations that Govern the Equity Statement

Please show work to all answers as this is being used as a study guide. The book has provide the correct answers in which I provided below. Currently I am having trouble reconciling back to the right answer the book gave. Your help is appreciated. The following is a statement of common shareholder' equity with some numbe

Converting foreign currencies

Country Currency Contract $/Foreign Currency Canada - dollar Spot .8437 30 day .8417 90 day .8395 Japan - yen Spot .004684

Business Plan- Coffee processing in Madagascar

Global Business Venture is to establish a coffee processing plant in the African country of Madagascar 1. Be sure to include the rationale for selecting your target country. 2. Identify potential domestic and international sources of financing for your global venture. Include at least two possible financial institutions

Currency Derivatives: swap rate, profitable arbitrage

4. An investor wishes to buy Euros spot (at $0.9080) and sell Euros forward for 180 days (at $0.9146). a. What is the swap rate on Euros? b. What is the forward premium or discount on 180- day Euros? 7. Suppose the euro is quoted at 0.7064-80 in London and the pound sterling is quoted at 1.6244-59 in Frankfurt. a. I

Risk reducing financial transactions: hedge raw materials prices

(1) Why might a firm undertake risk-reducing financial transactions, for example, a hedge against fluctuations in raw materials prices? Give at least one good reason. What types of risk-reducing financial transactions does your organization use? (2) Which of the following companies would be more likely to hedge its raw mater

Risks of Noncompliance in Corporate Governance

Risks of Noncompliance in Corporate Governance Organizations must address compliance concerns to ensure their longevity. There is a measurable amount of risk associated with falling out of compliance. The degree of risk to an organization differs from one compliance issue to another. As a team, think about the recommendatio

Global Finance

Please, answer the questions below. 1. What is the current account generally composed of? 2. What is the capital account generally composed of? 3. Is a current account deficit something to worry about? 4. If a government wants to correct a current account deficit, why can't it simply enforce restrictions on imports? 5. Wi

Economics, Organizational Decisions, Opportunity Costs, and Demand Curves

1. What role does economics play in your personal decisions? What role does economics play in your organizational decisions? 2. What are your opportunity costs of getting your degree from UOP online? 3. What can you say about the elasticity of the demand curve that faces the product (or service) produced by your organiza

Translation amount on the balance sheets

Suppose that on January 1, American Golf's French subsidiary, Golf du France, had a balance sheet that showed current assets of FF 1 million; current liabilities of FF 300,000; total assets of FF 2.5 million and total liabilities of FF 900,000. On December 31, Golf du France's balance sheet in Frances was unchanged from the fig

17-3 (Indirect quotes)

17-3 (Indirect quotes) Compute the indirect quote for the spot and forward Canadian dollar, yen, and, and Swiss franc contracts. Country Contract $/Foreign Currency Canada-dollar Spot .8437 30-day .8417 90-day .8395 Japan-

Risk Neutral Valuation of a Derivative

A stock is currently $25. It is known that at the end of 2 months it will be either $23 or $27. The risk-free interest rate is 10% per annum with continuous compounding. What is the value of a 2-month derivative that will be either 529 (if the stock price is 23) or 729 (if the stock price is 27)? Use no-arbitrage arguments.

International Finance: Effective financing rate

Assume the U.S. interest rate is 7.5%, the New Zealand interest rate is 6.5%, the spot rate of the NZ$ is $.52, and the one?year forward rate of the NZ$ is $.52. At the end of the year, the spot rate is $.48. Based on this information, what is the effective financing rate for a U.S. firm that takes out a one year, uncovered NZ

Export Competitiveness by Devaluing Currency

Many Asian governments have attempted to promote their export competitiveness by holding down the values of their currencies through foreign exchange market intervention. a. What is the likely impact of this policy on Asian foreign exchange reserves? On Asian inflation? On Asian export competitiveness? On Asian living standa

Argentina's ability to maintain currency convertibility

Following the Mexican devaluation, investors questioning Argentina's ability to maintain currency convertibility began pulling their money out of Argentina. In response, the Argentine government took extraordinary steps to maintain its exchange rate at $1 per peso. a. What were the likely consequences of this capital flight f

Comment on the following headlines in The Wall Street Journal

Comment on the following headlines in The Wall Street Journal: a. "Sterling Drops Sharply Despite Good Health of British Economy: Oil Price Slump Is Blamed" (January 17, 1985). b. "Dollar Surges as Coup in Soviet Union Revives Unit's Appeal as a Safe Haven" (August 20, 1991). c. "Dollar Plummets on Soviet Coup Failure"

Eight contracts of Euro currency futures

You buy eight contracts of Euro currency futures (i.e. total of one million Euros) with an initial margin of $2835 per contract. You buy the contracts at $1.3468/Euro and after a few days of trading the contracts end at a price of $1.3534/Euro with the following ending price each day: $1.3465, $1.3443, $1.3434 and $1.3534. Wh

Code of ethics - Social

Develop a code of ethics and social responsibility for a new college or university in regard to its foreign students. Your ethics code should cover the following areas - recruiting, degree completion times, scholarship availability, work study issues, language, culture, on-site versus off site instruction and any other issues

Organizational Modes

Harvard Business Case: 9-395-016 January 3, 1995 3M: Profile of an Innovating Company Through cases based on real companies, use the knowledge of how firms with different organizational modes can operate in a given industry, the factors that favor one mode over another, and the manner in which the modes relate to shiftin

International Finance: South Korea's Korean Air Lines (KAL)

27. South Korea's Korean Air Lines (KAL) is the world's 12th largest passenger airline and its second-largest cargo carrier. It has borrowed $5 billion (much of it denominated in dollars) to finance its fleet of planes. a. In what ways is KAL affected by depreciation of the won against the dollar? b. How can KAL use the f

Boeing Commercial Airplane Co.

21. Boeing Commercial Airplane Co. manufactures all its planes in the United States and prices them in dollars, even the 50% of its sales destined for overseas markets. Assess Boeing's currency risk. How can it cope with this risk?

Monsanto Co., the St. Louis chemical firm, is a major seller of herbicides.

13. Monsanto Co., the St. Louis chemical firm, is a major seller of herbicides. Its two brand name herbicides, Roundup and Lasso, have a large share of the U.S. and foreign markets. It's major competitors are other U.S. chemical companies. How are sales and profits of these products, as well as Monsanto's other chemicals, likely

Largest Distributors Locations

6. Aldridge Washmon Co. is one of the largest distributors of heavy farming equipment in Brownsville, Texas, located on the border with Mexico. The time is late 1981. Sales have increased dramatically over the past two years, and Aldridge is requesting an expansion of its credit line. What information would you as a banker need