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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?

-\$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?

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?

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?

1.12

1.63

1.82

2.04

3.64
Submitted: 5 years ago.Category: Finance
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3/18/2012
Financial Professional: Manal Elkhoshkhany, Tutor replied 5 years ago
Category: Finance
Satisfied Customers: 9,899
Experience: More than 5000 online tutoring sessions.
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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?

-\$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?

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?

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?

1.12
1.63
1.82
2.04
3.64
Category: Finance
Satisfied Customers: 9,899
Experience: More than 5000 online tutoring sessions.
Verified
Manal Elkhoshkhany, Tutor
Category: Finance
Satisfied Customers: 9,899
9,899 Satisfied Customers
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