You are working in the Forex Division of Flaggy Bank, Melbourne. You regularly report to your boss, the Manager of the Treasury and Forex Division. Suppose you observe the following interest rates, exchange rates and inflation rates between Australia and the UK. 3-month (annualized) interest rates in Australia and the UK are 7% and 3%, respectively. Spot and 3-month forward exchange rates, respectively, are A$1.80/f and A$1.85/f. Inflation rates in Australia and the UK are 4% and 5.5%, respectively. Using the above information, A. Could you advise your manager whether interest rate parity (IRP) holds between Australia and the UK? (Must show your calculations to advise your manager). If IRP does not hold, from where do you recommend that your bank should borrow and invest and why? B. Assuming no transaction costs, what would your bank's covered interest arbitrage profit (or loss) be on the borrowed amount of A$1 million or dollar-equivalent pound? (Must show your workings)?
Answers
The bank's covered interest arbitrage profit on the borrowed amount of a$1 million (or dollar-equivalent pound) would be a$767,999.
a. to determine whether interest rate parity (irp) holds between australia and the uk, we need to compare the interest rate differential with the forward exchange rate premium or discount.
1. calculate the interest rate differential: australian interest rate - uk interest rate
= 7% - 3% = 4%
2. calculate the forward exchange rate premium or discount: (3-month forward exchange rate - spot exchange rate) / spot exchange rate
= (a$1.85/f - a$1.80/f) / a$1.80/f = 0.05 / 1.80
≈ 0.0278 or 2.78% (expressed as a decimal)
comparing the interest rate differential of 4% with the forward exchange rate premium of 2.78%, we observe that the interest rate parity does not hold. the interest rate differential is higher than the forward exchange rate premium, indicating that there is an opportunity for arbitrage.
since the interest rate in australia is higher than in the uk, it would be recommended for the bank to borrow in the uk and invest in australia. this strategy takes advantage of the higher interest rates in australia.
b. to calculate the covered interest arbitrage profit or loss, we consider the following steps:
1. borrowing in the uk: convert a$1 million to pounds using the spot exchange rate:
a$1 million / a$1.80/f = £555,555.56
2. investing in australia: convert the borrowed amount in pounds to australian dollars using the forward exchange rate:
£555,555.56 * a$1.85/f = a$1,027,777.78
3. calculate the interest earned in australia: a$1,027,777.78 * (7% / 4) = a$1,799,999.99
4. repay the loan in the uk:
£555,555.56 * (1 + 3%) = £573,333.33
5. convert the repayment amount to australian dollars using the spot exchange rate: £573,333.33 * a$1.80/f = a$1,032,000
6. calculate the covered interest arbitrage profit or loss:
interest earned - loan repayment = a$1,799,999.99 - a$1,032,000 = a$767,999.99 99.
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Related Questions
The main source of finance for public corporations is s _ _ _ _ f _ _ _ _ _ _ (from t _ _)
Answers
Answer:
tax
Explanation:
the tax is a national practise carried all over the country
Quebec supplies roughly 75% of the world’s supply of what?
Answers
Answer:
Explanation:
Quebec supplies roughly 75% of the world's supply of maple syrup. The province of Quebec in Canada is known for its vast forests of maple trees and is responsible for the majority of the world's maple syrup production. The syrup is produced by tapping the trees, collecting the sap, and boiling it down to concentrate the sugar. Quebec's reputation for high-quality maple syrup, combined with its large-scale production, has made it the dominant global supplier of the sweet, sticky syrup.
Which of the following influences the consumer when he or she is deciding wether to buy a product?
A. The stock market
B. Opinion factors
C. External factors
D. Multiple factors
Answers
Answer:
D.
Explanation:
The factors that infuence a consumer's decision of buying product are multiple. It can be internal, external, economic, cultural, etc.
These factors include psychological factor, social factor, cultural factor, situational factor, etc.
Many times it's psychological factors such as moods. If a person is in bad or good mood, it will affect his behavior to buy a product. Culture or social life also influences consumer's buying habit. Some buy under peer pressure or to have status in society.
Therefore, option D is correct.
Answer: External factors
Explanation:
Which job in the Finance career pathway is best for someone with knowledge of risk factors for insurance claims?
Accounts Clerk
Insurance Underwriter
Claims Clerk
Business Financial Manager
Answers
Answer:
claims clerk im pretty sure ;)
Explanation:
The job in the Finance career pathway that is best for someone with knowledge of risk factors for insurance claims is Claims Clerk.
Insurance claim
An insurance claim is a formal request by a policyholder to an insurance company for coverage or compensation for a covered loss or policy event. The insurance company validates the claim and, once approved, issues payment to the insured or an approved interested party on behalf of the insured. For property casualty insurance, such as for your car or home, filing a claim can cause rate hikes to your future premiums.
Claims ClerkA claims clerk is vital to ensure that insurance companies run smoothly and settle disputes over denied claims efficiently. This position is a mediator between the insurance company and a person filing for claims to come to terms.
Thus. the job in the Finance career pathway that is best for someone with knowledge of risk factors for insurance claims is Claims Clerk.
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write the answers down like this pleaseeeeee
''1)??''
Answers
The definition of the terms in the image is given below as they are correctly matched:
The Definition of the termsAsset: An asset is any resource or property that has value and can be owned by a person, business or organization. Examples of assets include cash, property, investments, inventory, and equipment.
Debit: A debit is an accounting entry that represents an increase in assets or a decrease in liabilities or equity. In double-entry bookkeeping, a debit entry is recorded on the left-hand side of an account ledger.
Credit: A credit is an accounting entry that represents an increase in liabilities or equity or a decrease in assets. In double-entry bookkeeping, a credit entry is recorded on the right-hand side of an account ledger.
Capital: Capital refers to the money invested in a business by its owners or shareholders. It can also refer to the assets owned by a business that can be used to generate income.
Liabilities: Liabilities are debts or obligations owed by a business to other parties. Examples include loans, accounts payable, and taxes owed.
Cash payments: Cash payments refer to any money paid out by a business or individual for goods, services, or other expenses.
Profit: Profit is the amount of money that a business earns after subtracting all of its expenses from its revenue.
Cash receipts: Cash receipts refer to any money received by a business or individual for goods, services, or other income.
Owner's equity: Owner's equity represents the residual value of a business after all liabilities have been paid off. It is the value of the assets that the owner or owners of the business can claim as their own.
Transactions: Transactions refer to any exchange of goods or services that takes place between two or more parties.
Sole trader: A sole trader is a business owned and operated by a single person.
Income: Income refers to any money earned by a business or individual from the sale of goods or services.
Expenses: Expenses refer to any money spent by a business or individual in order to generate income or operate a business.
Accounting equation: The accounting equation is a fundamental principle of accounting that states that assets must always equal liabilities plus owner's equity.
Loss: A loss occurs when a business's expenses exceed its revenue, resulting in a negative net income.
Bank: A bank is a financial institution that accepts deposits from customers and provides loans and other financial services.
Subsidiary journal: A subsidiary journal is a book of accounts that records transactions for a specific type of transaction, such as purchases or sales. It is used to simplify the process of recording transactions in the general ledger.
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Journal: Storing Your Money
Directions: Based on what you have learned in this section, develop a financial plan of various
accounts you would use to deposit/store your money. Remember, you want to have quick
access to your money but also want it to gain some value.
Answers
Some of the accounts that can be used in the financial plan which allows access to money but still gains value include:
Savings AccountMoney Market AccountWhat accounts would help a financial plan ?A Savings Account is an ideal place to save funds intended for immediate or near future use, but without the need of urgent access. Generally,Savings Accounts bear comparatively reduced interest rates than most other finance accounts.
Money Market Accounts stand comparable to Savings Accounts with regards to storing funds; yet they tend to furnish higher interest levels as well as restrictions on how frequently money can be retreived.
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If l increase taxes by a certain dollar amount and increase government spending by the same dollar amount then The GDP will fall The GDP will stay the same The GDP will increase The GDP is not affected by taxes and spending
Answers
the GDP will remain unchanged.The GDP will stay the same.
The impact of taxation and government spending on GDP (Gross Domestic Product) is a critical issue in macroeconomics. The impact of taxation and government spending on the GDP can be described as follows:When taxes are increased and government spending is increased by the same amount, the GDP is usually expected to remain unchanged. This is known as a balanced budget multiplier.When taxes are reduced, on the other hand, people may have more disposable income to spend, causing GDP to increase.
This is referred to as an expansionary fiscal policy because it increases aggregate demand. On the other hand, if taxes are increased, people may have less disposable income, resulting in a decrease in spending and a decrease in aggregate demand. This is called a contractionary fiscal policy.When taxes are raised, people have less disposable income to spend, and the government has more revenue to spend. If the government spends the same amount that it receives in taxes, the net change in spending is zero, resulting in no change in GDP.
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Is the statement “the first day on a job is always easy” true?
Answers
Im gonna slap the person who told you that, Answer:
Pffttt ofc not its always hard the first day.
Good Explanation:
Your first day on the job can be intimidating, anxiety-inducing, nerve-wracking, and hopefully, you do good you know cause its a pain in the ####. So Don't underestimate any job buddy,
The answer is false btw.
why irs warns millions across us to hold off on filing taxes
Answers
Millions of people in more than 20 states, including California, Colorado, and Florida, who got tax refunds the previous year are being urged by the IRS to postpone filing their taxes.
Briefing:-According to the government, it wants to know if these tax breaks and special refunds are regarded as taxable income.
Can a firm be closed down by the IRS?If you owe taxes and are unable to pay them, the IRS may shut down your company. The IRS has the right to take legal action to enforce a lien. The business might be forced to close its doors and all of its assets might be taken.
What causes a business audit by the IRS?An IRS audit may result from excessive spending or significantly different expenses from one year to the next. Even though you could have a company credit card, you shouldn't make a lot of purchases. For instance, it may be suspicious to claim all of your meals throughout the working day as business costs.
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HELPP! In 2011 the United States economy had a GDP of $14,991 billion according to the United Nations. If consumption was $10,729 billion, government spending was $2,594 billion, and net exports was -$568 billion, how much was investment spending?
Answers
The total amount of the investment spending is $2,236 billion.
What is an investment spending?An investment spending means the private domestic investment or capital expenditures.
The formula for Investment spending is I = GDP − C − G − NX.
Investment spending = $14,991 billion - $10,729 billion - $2,594 billion - (-$568 billion)
Investment spending = $14,991 billion - $10,729 billion - $2,594 billion + $568 billion
Investment spending = $2,236 billion.
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Investment 2 Study questions Practice Questions: 1. On January 1, Stacy's portfolio was valued at $96,534. During the year Stacy received $3,285 in interest and $4,100 in dividends. She also sold one stock at a gain of $850. The value of the portfolio on December 31 of the same year was $113,201. At the end of June, Stacy withdrew $5,000 from the portfolio. What is the holding period return for the year? (refer slides for the formula) Sol: 25. 8% 2. Six months ago, Suzanne purchased a stock for $28 a share. Today she sold the stock at a price of $32 a share. During the time she owned the stock, she received a total of $1. 30 in dividends per share. What is her holding period return? Sol: 18. 9% 3. On January 1, Tim's portfolio was valued at $432,098. During the year Tim received $10,563 in interest and $15,060 in dividends. He also sold stock at a net loss of $12,870 and used the proceeds to purchase another stock. Tim did not contribute any more funds nor withdraw any funds during the year. On December 31 of the same year, Tim's portfolio was valued at $398,189. What is the holding period return for the year? Sol: -1. 9%
Answers
The holding period return for Stacy's portfolio for the year is 25.8%. The holding period return for Suzanne's stock is 18.9%.Tim's holding period return for the year is -4.67%, indicating a negative return.
Holding Period Return = [(Ending Value - Beginning Value) + Dividends + Gain] / Beginning Value
In Stacy's case, the beginning value of her portfolio on January 1 was $96,534, and the ending value on December 31 was $113,201. She received $3,285 in interest, $4,100 in dividends, and had a gain of $850 from selling a stock. She also withdrew $5,000 at the end of June.
Holding Period Return = [($113,201 - $96,534 + $3,285 + $4,100 + $850) - $5,000] / $96,534
= ($24,902 + $4,100 + $850 - $5,000) / $96,534
= $24,852 / $96,534
= 0.257 or 25.8%
Therefore, the holding period return for Stacy's portfolio for the year is 25.8%.
Holding Period Return = [(Ending Value - Beginning Value) + Dividends] / Beginning Value
In Suzanne's case, the beginning value of the stock was $28 per share, and the ending value was $32 per share. She received $1.30 in dividends per share.
Holding Period Return = [($32 - $28) + $1.30] / $28
= ($4 + $1.30) / $28
= $5.30 / $28
= 0.189 or 18.9%
Therefore, Suzanne's holding period return for the stock is 18.9%.
In the case of Tim's portfolio, the holding period return for the year is -1.9%.
Tim's portfolio had an initial value of $432,098 on January 1 and a value of $398,189 on December 31. He received $10,563 in interest and $15,060 in dividends. However, he sold stock at a net loss of $12,870 and used the proceeds to purchase another stock. Tim did not contribute any additional funds or make any withdrawals during the year.
Holding Period Return = [(Ending Value - Beginning Value) + Dividends + Gain] / Beginning Value
= [($398,189 - $432,098) + $10,563 + $15,060 + (-$12,870)] / $432,098
= (-$33,909 + $10,563 + $15,060 - $12,870) / $432,098
= -$20,156 / $432,098
= -0.0467 or -4.67%
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A big crowd is watching a football game. Suddenly, everyone jumps to their feet and starts cheering. The home team scored a touchdown. They are now in the lead. What is the stimulus in this scenario?
A) They are now in the lead.
B) The home team scored a touchdown.
C) A big crowd is watching the game.
D) Suddenly, everyone jumps to their feet and starts cheering.
Answers
B)
Explanation:
the definition of stimulus is something that causes a reaction so b is the only one that makes sense
You get a part time job through an employment service. The service charges you ten percent of your forst weeks pay as payment for getting the job. tax or no tax
Answers
Answer:
No tax
Explanation:
There's a lot to know before you use credit for the
first time. First and most obvious, you have to pay
back what you borrow. Every month you'll have a
due. This is the smallest amount
Select One
you can pay without accruing fees. Because of
interest, you'll have to pay back more than the
Select One
you initially borrowed. You should
also know that there's a ceiling for how much you can
borrow at once. This is called your
Select One
It can be a lot to juggle what
you're spending and what you owe, so a budgeting
method like Select One
I can help you get a
handle on everything.
Answers
Note that in the above credit scenario, this is the smallest amount you can pay without accruing fees.
What are the fees related to credit?It is the consumer's overall credit cost represented as a percentage of the total credit amount on a yearly basis.
Take note that credit improves your financial flow. It's handy since you don't have to spend a lot of money.
It is extremely useful when you need money for an emergency such as illness, property loss, or death. When you run out of funds, it allows you to buy products that are immediately required.
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Help what’s the answer?
Answers
Answer: My guess is C
Explanation: Not sure don't hate if it's not right
When estimating the content of an organization's culture, we should pay attention to:
answer choices
the values employees actually apply.
the beliefs that customers have about the company's products.
the values executives say employees should apply.
We should never pay attention to values or beliefs when estimating organizational culture.
Answers
Option 1 is correct. When estimating the content of an organization's culture, we should pay attention to the values employees actually apply.
Estimating the content of an organization's culture involves examining the values, beliefs, and behaviors that are practiced and reinforced by the employees. This is because culture is the sum of all the experiences, values, and behaviors that shape the way employees interact with each other, with customers, and with the organization as a whole. It is important to pay attention to the values that employees actually apply in their day-to-day work, rather than just the values that executives say they should apply, because these values reflect the real culture of the organization and help to explain why employees behave the way they do. The beliefs that customers have about the company's products may provide insights into the organization's reputation, but they do not directly reflect the culture of the organization.
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Correct Format -
When estimating the content of an organization's culture, we should pay attention to:
answer choices
the values employees actually apply.the beliefs that customers have about the company's products.the values executives say employees should apply.We should never pay attention to values or beliefs when estimating organizational culture.A new car sells for $25,000. The value of the car decreases by 15% each year. What is the approximate value of the car 5 years after it is purchased? 25,000 (1 minus 0. 15) Superscript 5, or approximately $11,093 25,000 minus 1500 (5), or approximately $17,500 25,000 (0. 15) Superscript 5, or approximately $18,984 25,000 minus left-bracket (100 minus 15) (5) Right-bracket, or approximately $24,575.
Answers
Depreciation is an accounting method for allocating the cost of a tangible or physical asset over its usable life. Depreciation is a term used to describe how much of an asset's worth has been used.
Initial value of the Car = 25,000
Depreciation of the Car= 15% per annum based on net book value
The computation:Note: t = Number of years
\(\text{Net book value} = 25,000 (1 - 0.15)^t\)
\(NBV = 25,000 (0.85)^5\\\ NBV = 25,000 (0.4437)\\\ NBV = 11,092.50 \)
As a result, the car's approximate value 5 years after purchase is 11,092.50.
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How does a supply curve differ from a demand curve and how is the different related to increases in price
Answers
Answer:
A demand schedule is a table that shows the quantity demanded at different prices in the market. A demand curve shows the relationship between quantity demanded and price in a given market on a graph. ... A supply curve shows the relationship between quantity supplied and price on a graph.
When revenue is greater than expenses, you have a:
a) Net Income
b) Contributed Capital
c) Net Loss
d) Historical Valuation
Answers
When revenue is greater than expenses, it means that the company has earned more money than it has spent. This results in a net income. So, The correct option is A.
Net income, also known as profit or net profit, refers to the amount of money that a company has earned after subtracting all of its expenses from its revenue. In other words, it is the amount of money left over when all the costs of running a business have been paid.
Net income is an important financial metric for companies, as it indicates the success of their operations. It is used to determine whether a company is generating positive cash flow and to measure the financial performance over a certain period of time.
The net income can also be used to pay dividends to shareholders or reinvested back into the business for growth and expansion.
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well apparently i have 25 points here u go
Answers
Answer:
thank you
Explanation:
you so niceee
Answer:
ez
Explanation:
Enter your gross pay, taxes, and deductions below. Press calculate when you’re ready.
Answers
Answer:
what are we supposed to be answering
The lending of deposits to others causes the deposit to be spent and income to increase.
What is this phenomena known as?
A. Multiple Deposit Expansion Multiplier
B. Circular Flow of Deposits
C. Exponential Deposit Multiplier
Answers
Answer:
the answer is aaaaaaaaaaaaaaaaaaaaaaaaaaaaaa
Explain the change in demand for watermelons using evidence, and show this effect on a supply and demand graph.
Answers
Answer:
Explanation:
Changes in the supply of melon
is brought about both positive and negative factors affecting supply of melon apart from the price of melon
If the company sues the plumber to recoup its loss in the lawsuit, which party will prevail?
Answers
The company can recover 100% of the judgment as an indemnity, because the plumber was negligent, not the company.
A group of people can get together to form a company, which is a legal body used to conduct and manage commercial or industrial business operations. The business lines of an organization rely on its structure, which can be a company, a partnership, or even a sole proprietorship.
A one-person business is one that has just one person as a member, according to Section 2(62) of the Companies Act. Additionally, shareholders or subscribers to a business's memorandum of organization are all that a firm has as members. In essence, an OPC is a corporation with just one stakeholder on the payroll.
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Type the correct answer in the box. Spell all words correctly.
Identify the type of marketing strategy based on the given scenario.
A premium watch manufacturing company decides to increase its sales by having a famous lead actor of a highly anticipated upcoming Hollywood movie wear their watch.
This marketing method is called _____.
Answers
Answer:Celebrity endorsement
Explanation:
each employee at caras construction earns $251 net and $316 gross per day. caras is accruing vacation pay for 16 employees for the last two days of march; therefore, the journal entry includes a:
Answers
The journal entry for accruing pay for 16 employees for the last two days of March would typically include a debit and a credit. Debit: Vacation Pay Expense - $251 * 16 employees * 2 days = $8,032 Credit: Vacation Pay Liability - $316 * 16 employees * 2 days = $10,112
The debit entry to "Vacation Pay Expense" represents the expense Caras Construction incurs for the vacation pay of its employees. The amount is calculated by multiplying the net daily rate of $251 by the number of employees (16) and the number of vacation days (2). The credit entry to "Vacation Pay Liability" represents the liability Caras Construction owes to its employees for the accrued vacation pay. The amount is calculated by multiplying the gross daily rate of $316 by the number of employees (16) and the number of vacation days (2). the specific accounts and amounts may vary depending on the company's accounting policies and chart of accounts. It's always recommended to consult with an accountant or financial professional for accurate and specific journal entries.
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Which of the following is not one of the benefits of using electronic slides as a visual aid
Answers
Answer:
B. It is difficult to record points made during a meeting on an electronic slide.
Romero Inc.manufactures paper products from 100 per cent recycled scrap.One set of workers at Romero Inc.has the full-time job of sorting scrap as it enters the facility.If the scrap is not sorted properly, the manufacturing process creates defective paper.The quality of sorting is regularly monitored by checking the quality of the paper products, and necessary instructions are given to the scrap sorters.Which of the following aspects of the job characteristics approach is high for the scrap sorters' job?
A) Skill variety
B) Task identity
C) Autonomy
D) Task significance
E) Feedback
Answers
Answer:
e
Explanation:
Why miscommunication and misunderstanding happen
Answers
Answer:
misunderstanding happens due to the distance . misunderstanding happen due to lack of time to solve problem . misunderstanding happens due to third person between two persons . misunderstanding happens due to the virtual world .
answers.
1. Becky and Tom are engaged and have set a date for the ceremony. Becky has, at her own expense
and with Tom's knowledge, rented a chapel for the wedding and a reception hall, bought a dress
and invitations, contracted for flowers, a photographer, and a caterer. Now Tom has told her that
he is breaking off the engagement. Does Becky have a legal recourse to recover her expenditures?
Answers
Yes, Becky has a legal recourse to recover her expenditures.
What is Expenditure?This is defined as a payment with either cash or credit to purchase goods or services.
Since the service wasn't rendered , Becky can recover her expenses legally although she may not recover all as an agreement between her and the business owners will be reached.
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