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I did the same cash and effect the repuation. I also select receviablenone too. Do you remember the last question for working capital?
No I can’t remember it but I remember currency exchange question. I think I’m better at remembering numbers. What was the dollar amount of forward contract? I couldn’t decide whether to just write the value in 6 months by dividing 6 month forward exchange rate or the amount to deposit now to pay in 6 months. I answered with 6 months time amount 1800/53.42=33.7 if I remember correctly.
Nothing I decided at the time makes sense now 🙁I think it was 33.7 but I’m sure I just divided by 6 month forward rate and left it there. Maybe I made a maths error or maybe it was 33.2
Leading and hedging answers please? What did you choose for purchase power parity and currency devalue?
I don’t remember leading and money market hedge. I need to try to write them down. Give me some time.
Could you help me to remember? So with lead payment, the spot rate was 50? 1800/50=36m but then we need to borrow this at what rate? 5%? 36*1.05=37.8?
I’m really not sure.
I can’t remember Money market hedge figures at all.I think the spot rate was 50.5. Do you remember the question regarding purchase parity power and curreny devalue due to import?
Spot rate was $1 50 – 50.5 pesos since we were buying pesos we should have used 50. No?
Did anyone have question regarding contractionary fiscal policy and expansionary monetry policy. Was the answer goverment expenditure decrease and money supply increase?
Yes, i got the same paper aswell, the question about floor value absolutely threw me off. Does anyone remember the value of NPV? and for the second part of question which variables of the sensitivity analysis is the right answer?
I don’t think that’s correct.
But monetary and fiscal policy I answered the same. In expansionary monetary policy money supply increases and in contractionary fiscal policy gov spending decreases.
I don’t remember purchase power parity and devalue question. I mean I remember something, but not entirely
I put 33.7 as this is a higher value and we are finding the payment amount. The company had to pay 500k more… I hope that makes sense
Bank can’t profit if they sell on low price and buy on high price. So when we sell they charge low price and when we buy the charge high price.
Singh you are right but I choose 33.2 which is incorrect. What were lead and money market hedge answer?
Ah yes S1ngh that makes sense.
saulatr
When we buy pesos with dollars we have to pay more in dollars as the bank will profit. 1800/50.5=35.6 vs 1800/50=36 so it’s 36 that we need to pay.If we were buying dollars with 1800 pesos we had, the the bank would have paid us 35.6 dollars.
And also the question which have the option of repurchasing stock increase marketibility
Anyone with the npv question of 6 marks
Sales units i gues 145 or 245 units, tax 26% in arrears, initial investment i guess 1.5m
I really dont know if we needed to incorporate tax or not as many students told me they got a npv question without tax.. Plz guide how did you solve it?
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