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bogdanovich [222]
2 years ago
11

Assume the spot rate for the British pound currently is $1.5701/£. Also assume the one-year forward rate is $1.5574/£. A risk-fr

ee asset in the U.S. is currently earning 3.2 percent interest rate. If interest rate parity holds, what rate can you earn on a one-year risk-free British security? A) 2.37 percent B) 4.57 percent C) 3.67 percent D) 4.04 percent E) 4.92 percent
Business
1 answer:
olga nikolaevna [1]2 years ago
7 0

Answer:

D) 4.04 percent

Explanation:

Spot rate is £1 = $1.5701

Forward exchange rate after 1 year is £1 = $1.5574

Risk free rate in US = 3.2 %

Forward rate = {Spot rate * (1 + risk free rate in US)} / (1 + risk free rate in UK)

1.5574 = {1.5701 * ( 1 + 0.032)} / (1 + risk free rate in UK)

(1 + risk free rate in UK) = (1.5701 * 1.032) / 1.5574

Risk free rate in UK = (1.62034 / 1.5574) - 1

Risk free rate in UK = 1.0404 - 1

Risk free rate in UK = 0.0404

Risk free rate in UK = 4.04%

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Suppose GDP in an economy is $3,542 billion. Personal Consumption Expenditures (C) are $2,343 billion, Government Spending (G) i
aleksandrvk [35]

Answer: -$45 billion.

Explanation:

Net Exports refers to Exports out of a country less imports into the country and it is a component of GDP using the Expenditure method. The other components include Government Spending, Investment and Consumption all of which are given in the above question.

The Net Exports are therefore;

GDP = Consumption + Investment + Government Spending + Net Exports

3,542 = 2,343 + 865 + 379 + Net Exports

3,542 = 3,587 + Net Exports

Net Exports = 3,542 - 3,587

Net Exports = -$45 billion

The Net Exports are negative which means that more goods were imported than were exported.

6 0
1 year ago
Arbitration differs from mediation in that arbitration:
sattari [20]
When we say arbitration, this is when there is a signed contract involved between two parties in order to settle a particular dispute. Arbitration is different from mediation in a way that arbitration is legally binding. The answer is option D. Hope this helps.
5 0
2 years ago
Read 2 more answers
As the winter holiday season was approaching, Margie decided to give each team a window display or an indoor display to decorate
Flura [38]

Answer:

The answer is autonomy (Option D)

Explanation:

Autonomy in human resource management refers to the level or degree of discretion and freedom which an employee is permitted to exercise when performing his/her job.  In other words, it means granting employees the freedom on how to approach work.  

A manager or superior like Margie (in the question) who gives employees autonomy simply gives minimal instruction on what needs to be achieved but allows the employees to go about the job in ways that best suit them.

7 0
1 year ago
Lily is planning to sell her home, which she bought seven years ago for a total of $168,000.the property value has increased by
abruzzese [7]
The answer is D. $251,700
7 0
1 year ago
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A heat integration project results in saving 5 MM Btu/h of heating utility and 14 MM Btu/h of cooling utility. The prices of hea
guapka [62]

Answer:

9.24 yr

Explanation:

The payback period refers to the amount of time it takes to recover the cost of an investment. In order to find a payback period we need to go through some calculations first  

Annual savings =  5 MM Btu/hr x 8,000 hr/yr x $4/MM Btu x 14 MM Btu/hr x  8,000 hr/yr x $7/MMBtu

Annual savings = $0.944 MM/yr

TCI = \frac{4.0 MM}{0.85}

TCI = $4.7 MM

Depreciation - Annualized fixed cost = \frac{[4.0 - 0] }{10}

Depreciation - Annualized fixed cost = $0.4 MM/yr

Total cost annualized = Annualized fixed cost + Annual operating cost

Total cost annualized = 0.4 + 0.5

Total cost annualized= 0.9 MM/yr

Annual net (after-tax) profit = Annual income - Total cost annualized x (1-Tax rate + Depreciation

Annual net (after-tax) profit = $0.944 MM/yr - $0.9 MM/yr x  1 -0.25 + $0.4 MM/yr

Annual net (after-tax) profit = 0.433MM/yr

Payback period = \frac{4.0}{0.433MM/yr}

Payback period = 9.24 yr

5 0
1 year ago
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