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Manal Elkhoshkhany
Manal Elkhoshkhany, Tutor
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For BusinessTutor: Question 7 Suppose one year

Resolved Question:

For BusinessTutor:
Question 7




Suppose one year ago, Hein Company had inventory in Britain valued at 240,000 pounds. The exchange rate for dollars to pounds was 1£ = 2 U.S. dollars. This year the exchange rate is 1£ = 1.82 U.S. dollars. The inventory in Britain is still valued at 240,000 pounds. What is the gain or loss in inventory value in U.S. dollars as a result of the change in exchange rates?
Answer







-$240,000








-$43,200








$0








$43,200








$47,473

.

2 points


Question 8




If one Swiss franc can purchase $0.71 U.S. dollars, how many Swiss francs can one U.S. dollar buy?
Answer







0.50








0.71








1.00








1.41








2.81



.

2 points


Question 9




Suppose a foreign investor who holds tax-exempt Eurobonds paying 9% is considering investing in an equivalent-risk domestic bond in a country with a 28% withholding tax on interest paid to foreigners. If 9% after-tax is the investor's required return, what before-tax rate would the domestic bond need to pay to provide the required after-tax return?
Answer







9.00%








10.20%








11.28%








12.50%








13.57%



.

2 points


Question 10




Suppose one British pound can purchase 1.82 U.S. dollars today in the foreign exchange market, and currency forecasters predict that the U.S. dollar will depreciate by 12.0% against the pound over the next 30 days. How many dollars will a pound buy in 30 days?
Answer







1.12








1.63








1.82








2.04








3.64
Submitted: 4 years ago.
Category: Finance
Expert:  Manal Elkhoshkhany replied 4 years ago.
Question 7

Suppose one year ago, Hein Company had inventory in Britain valued at 240,000 pounds. The exchange rate for dollars to pounds was 1£ = 2 U.S. dollars. This year the exchange rate is 1£ = 1.82 U.S. dollars. The inventory in Britain is still valued at 240,000 pounds. What is the gain or loss in inventory value in U.S. dollars as a result of the change in exchange rates?
Answer


-$240,000
-$43,200
$0
$43,200
$47,473

2 points


Question 8

If one Swiss franc can purchase $0.71 U.S. dollars, how many Swiss francs can one U.S. dollar buy?
Answer


0.50
0.71
1.00
1.41
2.81


2 points


Question 9

Suppose a foreign investor who holds tax-exempt Eurobonds paying 9% is considering investing in an equivalent-risk domestic bond in a country with a 28% withholding tax on interest paid to foreigners. If 9% after-tax is the investor's required return, what before-tax rate would the domestic bond need to pay to provide the required after-tax return?
Answer

9.00%
10.20%
11.28%
12.50%
13.57%


2 points


Question 10

Suppose one British pound can purchase 1.82 U.S. dollars today in the foreign exchange market, and currency forecasters predict that the U.S. dollar will depreciate by 12.0% against the pound over the next 30 days. How many dollars will a pound buy in 30 days?
Answer

1.12
1.63
1.82
2.04
3.64
Manal Elkhoshkhany, Tutor
Category: Finance
Satisfied Customers: 9776
Experience: More than 5000 online tutoring sessions.
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