Chapter_31

# Chapter_31 - Chapter 31 Problems 1-17 Input boxes in tan...

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Chapter 31 Problems 1-17 Input boxes in tan Output boxes in yellow Given data in blue Calculations in red Answers in green NOTE: Some functions used in these spreadsheets may require that the "Analysis ToolPak" or "Solver Add-in" be installed in Excel. To install these, click on "Tools|Add-Ins" and select "Analysis ToolPak and "Solver Add-In."

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Chapter 31 Question 1 Input Area: a. Cash \$100 Euro value per \$ € 1.1919 b. \$ value per euro \$0.8390 c. Euro amount € 5,000,000 f. Pesos per \$ 10.4855 Output Area: a. Euros € 83.8997 b. One euro \$1.1919 c. Dollar value \$5,959,476 d. More worth New Zealand dollar e. More worth Mexican peso f. # of Pesos/Euro 12.4976 This is a cross rate. g. Most valuable = Kuwait Dinar = \$3.4230 Least valuable = Indonesian rupiah = \$.0001079

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Chapter 31 Question 2 Input Area: SF 100 £ £100 US dollars \$100 SF value per \$ 0.7639 Pounds per \$ £1.7516 Output Area: £ 100, since \$57.091 £ 100, since (SF) 229.2970 Cross rate SF/£ 2.2930 Cross rate £/SF 0.4361
Chapter 31 Question 3 Input Area: Spot ¥/\$ rate 117.1600 6 month ¥/\$ rate 114.3500 Spot \$/£ rate 0.5709 3 month \$/£ rate 0.5705 Output Area: The yen is selling at a premium because it is more expensive in the forward market than in the spot market \$0.0085353 versus \$0.0087451 The £ is selling at a premium because it is more expensive in the forward market than in the spot market \$1.7516202 versus \$1.7528484 The value of the dollar will fall relative to the yen. The value of the dollar will fall relative to the poundr.

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Chapter 31 Question 4 Input Area: Spot exchange rate for CD \$1.26 6-month forward rate for CD \$1.22 Price of beer in Canada \$2.19 Output Area: a. The U.S. dollar, since C\$ = \$0.7937 b. Price of beer in U.S. \$1.7381 Among the reasons that absolute PPP doesn't hold are tariffs and other barriers to trade, transactions
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## This note was uploaded on 12/14/2010 for the course FINC 311 taught by Professor Stanley,t during the Fall '08 term at Winthrop.

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Chapter_31 - Chapter 31 Problems 1-17 Input boxes in tan...

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