Question

6.Zylex Corporation's German unit is looking to borrow €4.5 million from Deutsche Bank. Deutsche Bank quotes...

6.Zylex Corporation's German unit is looking to borrow €4.5 million from Deutsche Bank. Deutsche Bank quotes a rate of three-month LIBOR plus 0.5 percent for the 90-day loan. Currently, the three-month LIBOR is 4.175 percent. If the exchange rate on the payoff date is €0.8334/$, what is the dollar cost of the loan? (Round your final answer to two decimal places.)

7. A foreign exchange dealer is willing to buy the New Zealand dollar (NZ$) at $0.7621/NZ$ and will sell it at a rate of $0.7714/NZ$. What is the percentage bid-ask spread?
(Round your final answer to two decimal place places.)

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Rockville Corporation is going to borrow $250,000 from its bank at an APR of 8.5 percent....
Rockville Corporation is going to borrow $250,000 from its bank at an APR of 8.5 percent. The bank requires its customers to maintain a 10 percent compensating balance. What is the effective interest rate on this bank loan? Round to 4 decimal places and enter percentages as a decimal.
Aldo wants to borrow $12,000 from the bank and is choosing among two possible loans. The...
Aldo wants to borrow $12,000 from the bank and is choosing among two possible loans. The interest rate on both loans is 1.4 percent per month. Loan A would require him to make 60 equal monthly payments, with the first payment made to the bank in 1 month. Loan B would also require him to make equal monthly payments to the bank. However, 1) the monthly payment associated with loan B would be $30 less than the monthly payment associated...
You plan to borrow ​$30,000 from the bank to pay for inventories for a gift shop...
You plan to borrow ​$30,000 from the bank to pay for inventories for a gift shop you have just opened. The bank offers to lend you the money at 10 percent annual interest for the 6 months the funds will be needed. a. Calculate the effective rate of interest on the loan. b. In​ addition, the bank requires you to maintain a compensating balance of 15 percent in the bank. Because you are just opening your​ business, you do not...
(a) Prawn and Lobster are two companies that can borrow for a five year term at...
(a) Prawn and Lobster are two companies that can borrow for a five year term at the following rates. Prawn Lobster International credit rating A B Fixed-rate borrowing cost 6.5% 10.5% Floating-rate borrowing cost LIBOR + 1% LIBOR + 3% (i) Calculate the quality spread differential (QSD). Enter your answer as a percentage to 2 decimal places, e.g. 1.23 (1 Mark) Answer % (ii) Develop an interest-rate swap in which both Prawn and Lobster have an equal cost savings in...
23-1 A bank purchases a six-month $3 million Eurodollar deposit at an interest rate of 7.3...
23-1 A bank purchases a six-month $3 million Eurodollar deposit at an interest rate of 7.3 percent per year. It invests the funds in a six-month Swedish krona bond paying 7.5 percent per year. The current spot rate of U.S. dollars for Swedish krona is $0.1800/SKr. a. The six-month forward rate on the Swedish krona is being quoted at $0.1810/SKr. What is the net spread earned for six months on this investment if the bank covers its foreign exchange exposure...
Casper​ Landsten-CIA (A). Casper Landsten is a foreign exchange trader for a bank in New York....
Casper​ Landsten-CIA (A). Casper Landsten is a foreign exchange trader for a bank in New York. He has ​$0.95 million​ (or its Swiss franc​ equivalent) for a short term money market investment and wonders if he should invest in U.S. dollars for three​ months, or make a CIA investment in the Swiss franc. He faces the following​ quotes: Arbitrage funds available $ 950,000 Spot exchange rate (SFr/$) 1.2814 3-month forward rate (SFr/$) 1.2742 U.S. Dollar annual interest rate 4.801 %...
Singer Company has a line of credit with United Bank. Singer can borrow up to $374,000...
Singer Company has a line of credit with United Bank. Singer can borrow up to $374,000 at any time over the course of the Year 1 calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the first three months of Year 1. Singer agreed to pay interest at an annual rate equal to 2.00 percent above the bank’s prime rate. Funds are borrowed or repaid on the...
Singer Company has a line of credit with United Bank. Singer can borrow up to $420,000...
Singer Company has a line of credit with United Bank. Singer can borrow up to $420,000 at any time over the course of the 2016 calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the first three months of 2016. Singer agreed to pay interest at an annual rate equal to 1.50 percent above the bank’s prime rate. Funds are borrowed or repaid on the first day...
Sun Bank USA has purchased a 8 million one-year Australian dollar loan that pays 12 percent...
Sun Bank USA has purchased a 8 million one-year Australian dollar loan that pays 12 percent interest annually. The spot rate of U.S. dollars for Australian dollars (AUD/USD) is $0.625/A$1. It has funded this loan by accepting a British pound (BP)–denominated deposit for the equivalent amount and maturity at an annual rate of 10 percent. The current spot rate of U.S. dollars for British pounds (GBP/USD) is $1.60/£1. a. What is the net interest income earned in dollars on this...
Sun Bank USA has purchased a 32 million one-year Australian dollar loan that pays 16 percent...
Sun Bank USA has purchased a 32 million one-year Australian dollar loan that pays 16 percent interest annually. The spot rate of U.S. dollars for Australian dollars (AUD/USD) is $0.625/A$1. It has funded this loan by accepting a British pound (BP)–denominated deposit for the equivalent amount and maturity at an annual rate of 14 percent. The current spot rate of U.S. dollars for British pounds (GBP/USD) is $1.60/£1. a. What is the net interest income earned in dollars on this...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT