Today in the spot market $1 = 1.82 Swiss francs and $1 = 130 Japanese yen. In the 90-day forward market, $1 = 1.84 Swiss francs and $1 = 127 Japanese yen. Assume that interest rate parity holds worldwide. Which of the following statements is most CORRECT?
A. Interest rates on 90-day risk-free U.S. securities are higher than the interest rates on 90-day risk-free Swiss securities.
B. Interest rates on 90-day risk-free U.S. securities are higher than the interest rates on 90-day risk-free Japanese securities.
C. Interest rates on 90-day risk-free U.S. securities equal the interest rates on 90-day risk-free Japanese securities.
D. Since interest rate parity holds interest rates should be the same in all three countries.
E. Interest rates on 90-day risk-free U.S. securities equal the interest rates on 90-day risk-free Swiss securities.
Answer: B
You might also like to view...
Jackson Services had the following accounts and balances at December 31:AccountDebit CreditCash$20,000 Accounts Receivable 6,000 Prepaid Insurance 1,500 Supplies 5,000 Accounts Payable $500 Common Stock 16,200 Dividends 1,000 Service Revenue 20,000 Utilities Expense 2,000 Salaries Expense 1,200 Totals$36,700 $36,700 Using the information in the table, calculate the company's reported net income for the period.
A. $10,300. B. $15,800. C. $16,800. D. $23,200. E. $15,300.
A building supply company has many high-volume customers and many low-volume customers. A CRM system would be LEAST likely to help the company management decide to use which of the following methods for communicating with low-volume customers?
A) Every November, send each customer a new calendar that has the phone number of the building supply company printed on the cover. B) Once or twice a year, mail a new product catalog to each customer. C) Every few months, have a customer service representative from the building supply company call each customer. D) Have a sales representative make a personal one-on-one appointment with every low-volume customer at least twice a month. E) Give each low-volume customer the company Web address to check building supply products sold by the company.
________ direct the firm's course of action, maintain it within the boundaries of the stated mission and vision, and ensure its continuing existence.
Fill in the blank(s) with the appropriate word(s).
Which is not one of the financial costs of a recall?
a. Communication costs b. Engineering costs c. Marketing costs d. Legal costs