Need help with mini discussion questions on Purchasing Power

Oct 22nd, 2015
Anonymous
Category:
Accounting
Price: $15 USD

Question description

Purchasing Power

  1. What are the implications of deviations from purchasing power parity for countries’ competitive positions in the world markets? Respond to at least two of your classmates’ postings.


Call Price

Assume the spot Swiss franc is $0.7000 and the six-month forward rate is $0.6950. What is the minimum price that a six-month American call option with a striking price of $0.6800 should sell for in a rational market? Assume the annualized six-month Eurodollar rate is 3.5 percent. Use formulas to calculate the answers and clearly label your analysis. In 200- 300 words explain your answer and your rationale. Respond to at least two of your classmates' postings.


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