2.We have the United States of America and Switzerland. The 182 day
Question 2.We have the United States of America and Switzerland. The 182 day interest rate for the United States is 1.75% and 2.625% in Switzerland. Pretend for a moment that the spot exchange rate between USD and CHF is $0.583. Assuming that IRP holds, what will the 180 day forward rate be?
5.Calculate the straight-bond value of this bond issue:
Question 5.Calculate the straight-bond value of this bond issue:
Kona’s Salami Company issued debentures with a $1,000 par which are also convertible to common stock at a price of $25 per share. The debentures have a coupon of 8% with a maturity 20 years from now. The straight debt of equivalent risk is yielding 10% today. The common stock is trading at $23 per share today.
8.Fill in the blanks: The conversion value of the bond is $——– and
Question 8.Fill in the blanks: The conversion value of the bond is $——– and the straight-bond value of the convertible bond is $ ———. The variables are listed below:-The bond issue for ABC Company has a par value of $1,000-The debenture is convertible into ABC Company common stock at $50/share (market price is currently $60/share)-The coupon rate is 7% and matures in ten years with annual compounding-Similar risk and maturity straight debt is yielding 8%
13.We have two countries that are engaging in commerce who are concerned
Question 13.We have two countries that are engaging in commerce who are concerned about fluctuations in each other’s currency. Looking at inflation rates, the USA is expecting to have moderate inflation levels at a rate of 3.5% over the course of the next 12 months. The other country involved, Italy, is likely to experience high inflation rates (5.25%) over the next twelve months. Pretend for a moment that the current spot exchange rate is $1.497. What do you anticipate the spot rate will change to at the end of the twelve month period?
1 a. what action by a financial institution exposes it letters of credit risk?
Question 1 a. what action by a financial institution exposes it letters of credit risk? b. what type of risk the affects the financial institution as a result of letters of credit?c. what circumstances must occur for the financial institution to incur a loss (or an unexpectedly large loss) from letters of credit?
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