PART I. MULTIPLE CHOICE QUESTIONS 1. When the value of the British pound changes from $1.50 to $1.25‚ then the pound has _________ and the dollar has _________. a. appreciated; appreciated b. depreciated; appreciated c. appreciated; depreciated d. depreciated; depreciated 2. When the exchange rate changes from 1.0 euros to the dollar to 0.8 euros to the dollar‚ then the euro has _________ and the dollar has _________. a. appreciated; appreciated
Premium Futures contract Call option Option
United States. ’Eurocurrency Market ’ Rates on deposits in the Eurocurrency market are typically higher than in the domestic market‚ because the depositor is not protected by domestic banking laws and does not have governmental deposit insurance. Rates on loans in the Eurocurrency market are typically lower than those in the domestic market‚ because banks are not subject to reserve requirements on Eurocurrency and do not have to pay deposit insurance premiums. A. Eurocurrency market Definition
Premium Debt United States dollar Euro
VOYAGES SOLEIL: THE HEDGING DECISION Industry and Situation Analysis According to the case‚ the Canadian tour operating industry had been flourishing between 1988 and September 11‚ 2001. The Canadian economy growth rate also was increasingly as this industry that was very positively correlated with the overall economy. On September 11‚ 2001‚ there was the terrorist attack the Twin Towers of the World Trade Center in New York City. As a result‚ both buildings collapsed within two hours‚ destroying
Premium United States dollar Currency Foreign exchange market
Investment Analysis and Lockheed Tri Star The Case is divided into 5 different mini Cases. Each case is about another scenario. Case 1 is about a company called Rainbow Products. The company considers the purchase of a paint-mixing machine. The machine costs $35.000 but the company expects an annual saving of $5.000 additional cash flow. The machine is expected to last 15 years and the cost of capital is 12 %. First I would calculate the NPV and the IRR. If the NPV is higher then the return
Premium Net present value Cash flow Internal rate of return
Notwithstanding these differences‚ each statement gives a different yet important view of organisational performance. Cash according to Holmes et al 2005:166 is “cash in hand and deposits repayable on demand less overdrafts repayable on demand; i.e. they can be withdrawn at any time without penalty. Cash includes cash and deposits denominated in foreign currency.” Once‚ accounts were comprised of just the balance sheet and the profit and loss statements. However in the late 1960’s‚ a period characterised
Premium
CHAPTER 4: MANAGEMENT OF CURRENT ASSETS MANAGING MANAGING INVENTORY EOQ MODEL Reorder Point ABC System Just-in-Time System EOQ = √2 X S X O / H S = no of usage per period Ordering Cost Admin cost to place O = cost per order and receive order H = cost of holding the Holding Cost Variable cost/unit to stocks per period hold the stocks EOQ =number of unit to order per THC = O X (S/EOQ) + H X period. (EOQ/2) ROP = level of stock (in unit) to reach before reorder the stocks
Premium Money Debt Balance sheet
ASA University Review‚ Vol. 6 No. 2‚ July–December‚ 2012 Cash Flow Statement Disclosures in Pharmaceutical Companies: Bangladesh Perspective Mst. Joynab Siddiqua* Mohd. Takdir Hossan* Abstract Cash flow statement is a vital part of the financial statements. Preparation of cash flow statement is required as per Companies Act 1994 and the public limited companies enlisted with stock exchange are to prepare this statement as per other statutory laws and regulations. The acceptance of International
Premium Cash flow statement Cash flow Financial statements
1. I disagree with the statement “Inflation doesn’t benefit anyone in the economy” because inflation primarily determines the price stability in the country‚ and states that there is an ongoing economic activity. This economic activity can be determined through investments running in the country. Inflation will benefit citizens as long as it is between the targeted inflation rate of that certain country. An example would be the recent inflation rate in the Philippines wherein it was leaning towards
Premium Inflation Monetary policy
Transaction Exposure (Note 11; Ch 8) 1. Transaction Exposure 2. Hedging Foreign exchange exposure is a measure of the potential for a firm’s profitability‚ net cash flow‚ and market value to change because of a change in exchange rates These three components (profits‚ cash flow and market value) are the key financial elements of how we evaluate the relative success or failure of a firm 1. Transaction Exposure: measures changes in the value of outstanding financial obligations
Premium Forward contract Futures contract Time value of money
Economic crisis has been a common phenomenon all over the world in the past century. A country experiences a sudden down turn brought about by a financial crisis‚ financial assets lose a large part of their value‚ a falling GDP‚ drying up of liquidity‚ rising or falling of prices due to inflation or deflation all being common characteristics of an economic crisis which can take the form of a recession or a depression. According to Dr. Tarek H. Selim in his research titled “A Comparative Essay
Premium Currency United States dollar Foreign exchange market