Principles of International Finance

FIN 612: Principles of International finance I (003) Homework 1 Adrian Joseph tibia? September 28, 2011 1. BMW needs to job for $10,000,000 to purchase CVJ boots (automotive parts) for its new Z4 lubber from DuPont. BMWs banker quotes bid convey evaluate of $1.12-$1.14/A . What pull up stakes for be the euro cost of the C boots? understanding: Note that the ranges ar constructed as the dollar sign crown worth of euro. Therefore, the trader (BMWs banker) is leave behindinging to spoil the underlying currency (euro) at $1.12/A , the bid financial rank such that: C $1.12 A C A1 C x = $10, 000, 000 × $1.12 x× = $10, 000, 000 = A 8, 928, 571 C 2. Deutsche patois quotes bid-ask outranks of EUR0.9850-0.9855/USD and 104.30-104.40/USD. What would be the Deutsche sticks direct inquire harm for yen in harm of euros (i.e. EUR/JPY)? termination: The asking impairment for yen in terms of USD is the dollar set of yen. Since the bid-ask spread $1 (ask?bid) is invariably positive, the asking charge for yen in terms of USD is 104.30 , which is great than $1 C . The Bank as well as asks for A 0.9855 . Therefore, 104.40 $ A 0.9855 C × $ $1 A 0.009448706 C ? 104.30 3. If the JPY/USD telephone exchange rate is 104.30/$ and it takes 25.15 THB (Thai bahts) to purchase one USD, what is the yen cost of the baht?

dish up: We qualify 25.15 THB/$ to 25.15$1 THB in order to cipher the yen price of the baht, how lots yen is needed to taint one baht. 104.30 $1 × ? $ 25.15 THB 4.147117296/THB 4. The Mexican peso (MXN) has weakened substantially coition to the dollar (USD). call up the current rate of exchange is MXN9.5/USD. Your enthronization advisor at Goldman Sachs argues that the peso will lose 15% of its value relative to the dollar everywhere the next form. What is Goldman Sachs forecast of the exchange rate in one grade? Would your answer di?er if Goldman Sachs had predicted a 15% appreciation of the dollar relative to the peso oer the next year? Answer: Goldman Sachs argues that the peso will devalue relative...If you want to get a full essay, order it on our website: Ordercustompaper.com

If you want to get a full essay, wisit our page: write my paper