Calculate the cost of Grupo Bimbo’s dollar loan in peso-denominated interest based on purchasing power parity expectations, determine the real interest cost adjusted for inflation, and find the actual peso-denominated interest cost of the loan given the actual spot rate at the end of the year.
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What is the dollar price of a Toyota Corolla from Osaka, Japan in the following situations: a) at the beginning of the year, b) assuming purchasing power parity holds at the end of the year, c) with 100% exchange rate pass-through at the end of the year, and d) with 75% exchange rate pass-through at the end of the year?
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Theresa Nunn is planning a 30-day vacation in Pulau Penang, Malaysia, one year from now. The hotel charges a certain amount per day for a luxury suite plus meals, and any increase in the room charges will be limited to the increase in the Malaysian cost of living. Malaysian inflation is expected to be a certain percentage per annum, while U.S. inflation is expected to be another percentage. How much might Theresa need to pay one year from now for her 30-day vacation?
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If PPP held, what should the Ps/$ exchange rate have been? Determine the percentage over or undervaluation of the Argentine peso, and then determine the probable causes of the undervaluation.
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Given a data table of quotes from London and Yew York containing the Spot rates, the 1-year Treasury bill rates, and the expected inflation rates, you are asked to calculate the implied inflation for Europe next year, and also to compute the 1-year forward exchange rate between the dollar and the euro.
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Determine the CIA (or UIA) profit potential, and conduct an interest arbitrage. Works on ALL arbitrage problems through 6.15.
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Given the price of a tall vanilla latte in Zagreb and in New York City, you are asked to calculate the percentage overvaluation or undervaluation of the Croatian kuna.
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Calculate the effective cost of funds for EAC in Thai baht terms by considering inflation rates, expected exchange rate changes, and borrowing options.
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Yize Shen is a trader at Sumatra Funds in Jakarta, and she focuses on the USD to SGD cross-rate. She believes that SGD will appreciate against USD, and she has the following options to choose from… Given a table with put and call options, determine which option to purchase, the breakeven price, gross profit, and net profits at various future expected spot rates.
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Given the current exchange rate between the USD and the SGD, along with a table conveying information about put and call options on the SGD, you are asked to decide which kind of option should be purchased by Yize Shen. Finally, you are asked to compute the gross profits and net profits at various spot rates at the end of 90 days.
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