代做Corporate and International Finance (N1563) Seminar 7代写C/C++程序

Corporate and International Finance (N1563)

Seminar 7

Question 1:

Table 7.1 Exchange rates in April 2018

 

* Direct quotes (number of U.S. dollars per unit of foreign currency). Other quotes are indirect (units of foreign currency per U.S. dollar).

Source: The New York Times, April 26, 2018 (Reproduced from Fundamentals of Corporate Finance textbook).

Use Table 7.1 to answer the following questions:

a. How many euros can you buy for $100? How many dollars can you buy for 100 euros?

b. How many Swiss francs can you buy for $100? How many dollars can you buy for 100 Swiss francs?

c. If the British pound depreciates with respect to the dollar, will the exchange rate quoted in Table 7.1 increase or decrease?

d. Someone offers you the choice between a U.S. and a Canadian dollar. Which do you choose?

Question 2:

A businessman has just completed transactions in Italy and England. He is now holding €250,000 and £500,000 and wants to convert to U.S. dollars.

His currency dealer provides this quotation:

USD/GBP  =  0.6488 – 0.6493   

EUR/USD  = 1.4739 – 1.4744

What are his proceeds from conversion?

Question 3:

Suppose that Australia is the home country. Determine whether the following quotes are direct or indirect, and convert indirect (direct) quotes to direct (indirect) quotes:

a. Euro: 1.4462 AUD/EUR

b. Canada:  0.9812 CAD/AUD.

Question 4:

KW Corporation manufactures flat-packed kit wardrobes. It is considering building a manufacturing facility in Narnia. The company is expected to produce Narnian cash flows as follows. The current spot rate is 2.0 Narnian leos:$1, and KW expects a 15% return on its investment. If the interest rate is 4% in the United States and 9.02% in Narnian, what is the NPV of the project in dollars?

Cash Flow Forecasts (in millions of leos)

Year	0	1	2	3	4	5
	-7.6	2.0	2.5	3.0	3.5	4.0

Question 5:

The 2-year interest rate is 6.0% in Mexico and 3.0% in the USA. An American company forecast that its new plant in Mexico will produce a cash flow of 1.3 million pesos in year 2. If the current spot rate is MXN20.0 = USD1, what is the expected dollar cash flow from the plant in year 2?

A) $27.54 million.

B) $61,373.

C) $63,160.

D) $1.26 million.

Question 6:

You can make a one year $1,000,000 investment in Mexico at an interest rate of 12%. Conversely, you may borrow in the USA at a rate of 4%. If the spot exchange rate is 11 Peso per 1 USD and the one year forward rate is 12 Peso per 1 USD, what profit will you make from such an investment?

A) $13,333 profit

B) $13,333 loss

C) $40,000 profit

D) $40,000 loss