What would be the expected effective cost of financing if you could borrow Korean won (KRW)at 10% p.a.
What would be the expected effective cost of financing if you could borrow Korean won (KRW)at 10% p.a. but expect the won to depreciate by 5% over the next year? Please present youranswer as a percentage, rounded to two decimal points, e.g., 4.56%.What would be the expected effective cost of financing if you could borrow British pounds (GBP)at 10% p.a. but expect the pound to depreciate by 2% over the next year? Please present youranswer as a percentage, rounded to two decimal points, e.g., 4.56%.Rodgers International just purchased a Mexican company for 1,000,000 Mexican pesos. Thespot exchange rate is MXN/USD 13.5135. The nominal interest in Mexico is expected to be 16%next year and in the U.S. it is expected to be 6%. Rodgers believes it will be able to sell thecompany after one year for 1,250,000 Mexican pesos. Assuming that the exchange rate willadjust according to the International Fisher equation and that the company uses an 18%discount rate for capital budgeting projects, what is the net present value of this investment?What would be the expected effective cost of financing if you could borrow Hungarianforints (HUF) at 6% p.a. but expect the forint to appreciate by 5% over the next year? Pleasepresent your answer as a percentage, rounded to two decimal points, e.g., 4.56%.Assuming the deposit would be hedged with a forward contract, what would be the effectivereturn from depositing funds in a Swiss franc (CHF) bank account at 9% p.a. when the spot rateis USD/CHF 1.1152 and the twelve-month forward rate is USD/CHF 1.1352? Please presentyour answer as a percentage, rounded to two decimal points, e.g., 4.56%.What would be the expected effective cost of financing if you could borrow British pounds (GBP)at 5% p.a. but expect the pound to appreciate by 6% over the next year? Please present youranswer as a percentage, rounded to two decimal points, e.g., 4.56%.Assuming the deposit would be hedged with a forward contract, what would be the effectivereturn from depositing funds in a British pound (GBP) bank account at 6% p.a. when the spotrate is USD/GBP 1.6518 and the twelve-month forward rate is USD/GBP 1.6458? Pleasepresent your answer as a percentage, rounded to two decimal points, e.g., 4.56%.Assuming the deposit would be hedged with a forward contract, what would be the effectivereturn from depositing funds in a Brazilian real (BRL) bank account at 12% p.a. when the spotrate is BRL/USD 2.4137 and the twelve-month forward rate is BRL/USD 2.4510? Pleasepresent your answer as a percentage, rounded to two decimal points, e.g., 4.56%.Calculate the U.S. dollar-based percentage return or loss (rounded to two decimal points, e.g.,4.56%) of an American investor who bought common stock in a Brazilian company at BRL 100per share one year ago and just sold it at BRL 95 per share. The spot exchange rate one yearago was BRL/USD 2.4137 and the spot rate now is BRL/USD 2.3809.Rodgers International just purchased a French company for 1,000,000 euros. The spotexchange rate is USD/EUR 1.3663. The nominal interest in France is expected to be 9% nextyear and in the U.S. it is expected to be 4%. Rodgers believes it will be able to sell the companyafter one year for 1,200,000 euros. Assuming that the exchange rate will adjust according to theInternational Fisher equation and that the company uses a 14% discount rate for capitalbudgeting projects, what is the net present value of this investment?Assuming the deposit would be hedged with a forward contract, what would be the effective return from depositing funds in an Argentine peso (ARS) bank account at 12% p.a. when the spot rate is ARS/USD 8.0386 and the twelve-month forward rate is ARS/USD 7.9681? Please present your answer as a percentage, rounded to two decimal points, e.g., 4.56%.Calculate the U.S. dollar-based percentage return or loss (rounded to two decimal points, e.g., 4.56%) of an American investor who bought common stock in a Swiss company at CHF 40 per share one year ago and just sold it at CHF 44 per share. The spot exchange rate one year ago was USD/CHF 1.1152 and the spot rate now is USD/CHF 1.0989.