SIB 675 - Assignment 2 - 2016 Summer DUP - International Finance SIB 675 Assignment No 2 Due Total 80 Marks(Show all calculations in detail 1 Forward

SIB 675 - Assignment 2 - 2016 Summer DUP - International...

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International & Finance: SIB 675 Assignment No. 2 – Due: July 13, 2016 Total – 80 Marks (Show all calculations in detail) 1.Forward Contract.The Wolfpack Corporation is a U.S. exporter that invoices its exports to the United Kingdom in British pounds. If it expects that the pound will appreciate against the dollar in the future, should it hedge its exports with a forward contract? Explain. 4 Marks 2. a)What are the very basic laws that determine the value of a currency? 3.Inflation Effects on Exchange Rates.Assume that the U.S. inflation rate becomes high relative to Canadian inflation. Other things being equal, how should this affect the (a) U.S. demand for Canadian dollars, (b) supply of Canadian dollars for sale, and (c) equilibrium value of the Canadian dollar? Explain in words and with dynamic demand and supply diagrams. 6 Marks
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  • Summer '19
  • Finance, Foreign exchange market, United States dollar

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