EXERCISES 1. Suppose that a treasurer of Apple has an extra cash reserve of USD 100.000.000 to invest for six months. The six-month interest rate is 8 % per annum in the U.S. and 7 % per annum in Germany. Currently‚ the spot exchange rate is USD/EUR = 1.01 and the sixmonth forward exchange rate is USD/EUR = 0.99. The treasurer of Apple does not wish to bear any exchange risk. Where should he/she invest to maximize the return? Investing in the US | Amount in USD | US | Amount in USD | |
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ECO/372 Final Examination Study Guide This study guide prepares you for the Final Examination you complete in the last week of the course. It contains practice questions‚ which are related to each week’s objectives. Highlight the correct response‚ and then refer to the answer key at the end of this Study Guide to check your answers. Use each week’s questions as a self-test at the start of a new week to reflect on the previous week’s concepts. When you come across concepts that you are unfamiliar
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Analyze and comment about RCA of Vietnam based on data from Trade Map in 2012. Contents Introduce about RCA Analyse of some VN’s industries Evaluation of statistics Case study of Rice: RCA of Vietnam Rice in comparision with Thailand Introduction Coefficient of Revealed Comparative Advantage (RCA). • Represent comparative advantage or disadvantage of a certain country in a certain goods or services. • It is based on the Ricardian comparative advantage concept. EX1 : Export value of commodity
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Week 3 Reflection ECO/372 “Week Three takes focuses on interest rates‚ the Federal Reserve System and how the money multiplier effect facilitates the creation of money. The main topics uncovered for this week include Federal Reserve System‚ multiplier effect and monetary policy” (Week Three Student Guide). We learned about what money is and what it does. Money is a highly liquid financial asset that’s generally accepted in exchange for other goods‚ is used as a reference in valuing other goods‚ and
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Introduction……………………………………………………………….3/7\ Relationship………………………………………………………………3/7~4/7\ new requirements…………………………………………………………4/7~5/7\ The efficiency and reliability of international logistics…………………..5/7~6/7\ Conclusion ………………………………………………………………….6/7\ References…………………………………………………………………7/7\ International trade and international Logistics The rapid expansion of trade liberalization and the growth of global capital markets and integration‚ information technology and the progressive
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Japanese yen‚ the expected profit of GM’s Japanese competitors will decrease. Hence‚ the Japanese auto price will correspondingly reduce‚ this will lead to a reduce of GM’s market share. Besides‚ the auto price elasticity is 10% change in sales result from 5% change in price‚ which is relatively high within the manufactory industry‚ thus with one dollar change in selling price the market share will fluctuate a high portion subsequently. Additionally‚ Japanese auto companies derives around 50% of their profit
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Question 1 i. The expected spot rate was decreased and depreciation of 4.05% percent. ii. The higher the inflation in United States will lead to a higher price of U.S. products. Therefore‚ U.S. consumers will buy more Canadian goods. The demand for Canadian dollars will appreciate and increase in U.S. because U.S. inflation rate become high. The supply of Canadian dollars for sale
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STRUCTURED TRADE FINANCE WORKFLOW FOR TRADE FINANCE HOUSE Receipt of Request from potential client Deal Structuring Receive written request for Structured Finance product from a customer. Discuss the Business Proposal Authenticate the request to ascertain that it is genuine. Where applicable‚ check supporting documentation e.g. Audited accounts‚ Financial projections‚ proposed security‚ etc. Determine suitability of the client to the proposed solution. Assess all variables of the proposal
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Questions from Chapter 7 Q-2 Answer : Yes because one could purchase new zealand dollars at yardley Bank for $.40 and sell them to Beal Bank for $.401. With $1 million available‚ 2.5 million New Zealand dollars could be purchased at Yardley Bank. These New Zealand dollars could then be sold to Beal Bank for $1‚002‚500‚ thereby gener ating a profit of $2‚500. The large demand for New Zealand dollars at Yardley Bank will force this bank’s ask price on New Zealand dollar to increase
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International trade is the exchange of capital‚ goods‚ and services across international borders or territories. Trading aides the country in multiple ways; providing lower cost to a consumer‚ better healthcare‚ technology and even education. But there are also negative effects of trading. Some if asked fell that international trading is a necessary evil. It helps economies grow and can increase the welfare of society. However there should be a tighter restriction on what is to be traded and exactly
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