International Finance , two questions

Anonymous
timer Asked: Feb 8th, 2019
account_balance_wallet $5

Question Description

need answer for those two questions less than 4 hours from now,

Q1

  1. The exchange rate quotations are as follows on September 22, 2011:

$1 = 13.8791 Mexican pesos

1 Mexican peso = 0.0535 Euros

You are planning to study abroad in Italy next Spring and need to purchase 10,000 Euros with U.S. dollars. How many U.S. dollars will you need for your stay in Italy?


Q 2

Baylor Bank believes the New Zealand dollar will appreciate over the next five days from $.78 to $.80. The following annual interest rates apply:

Currency Lending Rate Borrowing Rate

Dollars 7.10% 7.50%

New Zealand dollar (NZ$) 6.80% 7.25%

Baylor Bank has the capacity to borrow $5 million. If Baylor Bank’s forecast is correct, what will its dollar profit be from speculation over the five‑day period?


**

Be sure to provide explanations to short essay questions and show your work for calculations. Simple answers like “go up” or “go down” only earn you partial credit.

Tutor Answer

mickeygabz
School: UT Austin

Attached.

SPRING 2019 EXAM1

Name:_____________________

Notes:
1. Please TYPE answers in a Word file and submit answers (You don’t have to include
the original questions) through the “Assignments” at DuCanvas by 11:59pm on
Thursday, 2/7.
2. Be sure to provide explanations to short essay questions and show your work for
calculations. Simple answers like “go up” or “go down” only earn you partial credit.

1. Assume that there are substantial capital flows among Canada, the U.S., and Japan.
If interest rates in Canada decline to a level below the U.S. interest rate, and
inflationary expectations remain unchanged,
o How could this affect the value of the Canadian dollar against the U.S. do...

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Review

Anonymous
Good stuff. Would use again.

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