answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
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%

You might be interested in
In 1954, the state governor of Mississippi publicly rejected the court-ordered desegregation of the University of Mississippi on
Bumek [7]

Answer:

Critical Juncture

Explanation:

A critical juncture refers to the notion that at a certain point the prevailing institutional arrangements. put in place at a certain point in time become entrenched because a change in the arrangement has a potential to alter the course of the future.

5 0
2 years ago
Over the course of 50 years, Dexter grew his company to eight package shipping stores. With his retirement approaching and the i
Butoxors [25]

Answer:

B. Defensive Strategy

Explanation:

One thing that is inevitable in business is competition. Dexter decided to use a defensive strategy for his business with his retirement coming in and competition becoming even stronger.

Defensive strategies are management techniques used to "fend off attacks" from competitors. It helps the decision maker hold on to shares of the market. Some companies do this to lower the risk of being attacked when they perceive attacks coming from competitors so in turn, those competitors can focus on other competitors in the market.

8 0
2 years ago
Consider the relationship between monopoly pricing and price elasticity of demand. If demand is inelastic and a monopolist raise
strojnjashka [21]

Answer:

itll be 10

Explanation:

because on how itll show for the energy on demand

4 0
2 years ago
Mr. williams expects to retire in 30 years and would like to accumulate $1 million in his pension fund. if the annual interest r
siniylev [52]
Jello!!!l!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
3 0
2 years ago
Measures defined by management and used to internally evaluate the success of a​ firm's financial, business​ process, customer,
ladessa [460]

Complete Question:

Measures defined by management and used to internally evaluate the success of a firm's financial, business process, customer, and learning and growth are called

A. parameters.

B. the balanced scorecard method.

C. BPM.

D. KPIs.

E. benchmarks.

Answer:

D. KPIs.

Explanation:

Measures defined by management and used to internally evaluate the success of a​ firm's financial, business​ process, customer, and learning and growth are​ called KPIs.

KPIs is simply an acronym for key performance indicators.

4 0
2 years ago
Other questions:
  • When the same attribute in related data files has different values, this is called data?
    9·1 answer
  • Joshua is paid the minimum hourly rate for his work as a lifeguard. joshua's compensation is called a ________.
    10·1 answer
  • Alejandro wants to create a table comparing the performance of his company's eight salespeople. For each salesperson, he will gi
    8·2 answers
  • Emma is a recent college graduate who is unmarried and has no children. Which of the following benefits would be of least import
    7·1 answer
  • Many homes are decorated in spring colors because these colors are deemed to be uplifting; however, most department stores do no
    11·1 answer
  • BASICS OF CAPITAL BUDGETING You recently went to work for Allied Components Company, a supplier of auto repair parts used in the
    5·1 answer
  • The Lotus Point Condo Project will contain both homes and apartments. The site can accommodateup to 10,000 dwelling units. The p
    11·1 answer
  • On April 1, Otisco, Inc. paid Garcia Publishing Company $1,548 for 36-month subscriptions to several different magazines. Otisco
    5·1 answer
  • Cornwall Company has two divisions, A and B. Information for each division is as follows: A B Net earnings for division $ 40,000
    7·1 answer
  • We made a distinction between pro-business policies and pro-market policies. Which of the following is a way to put that distinc
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!