If a speculator purchases $1 million worth of Swiss francs, and the United States subsequently devalues the

Question:

If a speculator purchases $1 million worth of Swiss francs, and the United States subsequently devalues the dollar by 20 percent, how much in dollars will the speculator gain or lose by converting the francs back into dollars after the devaluation?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Basic Economics

ISBN: 978-1111826642

16th edition

Authors: Frank V. Mastrianna

See More Books

Question Posted: Mar 08, 2018 09:59 AM

See More Questions

Calculate the equity of the Gravel Construction Company if it has $1 million worth of assets? Gravel has $127,000 in current liabilities and $210,000in long term liabilities.
Suppose that the production of $1 million worth of steel in Canada requires $100,000 worth of taconite. Canada's nominal tariff rates for importing these goods are 20 percent for steel and 10 percent...
Assume a speculator anticipates that the spot rate of the franc in three months will be lower than todays three-month forward rate of the franc, $0.50 = 1 franc. a. How can this speculator use $1...
The annual revenues associated with several large apartment complexes are $300, $450, $425, $50, $75, and $150 for years 0, 1, 2, 3, 4, and 5, respectively. Determine the net cash flow and whether...
Lysine reacts with two equivalents of benzyloxycarbonyl chloride to give a derivative containing two benzyloxycarbonyl groups. What is the structure of this compound?
Financial data for Bridger Inc. for last year are as follows: The company paid dividends of $85,000 last year. The "Investment in Brier Company" on the balance sheet represents an investment in the...
You are managing a pension fund with a goal of maximizing the long-term growth rate. There are three assets available. Asset 1 has a risk-free return of 5%. Assets 2 and 3 each are driven by...
City Bus Corporation provides school bus transportation to public schools in Lancaster County. City Bus owns 50 buses that are garaged in three different cities within the county. The firm faces...
What is the purpose of the Management, Dynamic and Virtual Interfaces of WLC2504? What is PoE? How many PoE ports does the controller WLC2504 have? How many APs does wireless controller type Cisco...
The fermentation of corn produces a mixture of 3.3 mol% ethyl alcohol in water. If 20 mol% of this mixture is distilled at 1atm by a simple, batch distillation, calculate and plot the...
Should the United States devalue the dollar further in an effort to improve its balance of payments? What would be the effects of devaluation?
Given the recent experience of the International Monetary Fund (IMF), what is now the primary function of this organization?
Briefly explain why some organizations are developing strategic selling alliances.
The areas of walls A, B, and C, which surround the vessel filled with homogeneous liquid are shown in the figure aside. Compare the liquid pressure forces around points A, B, and C. 25 A liquid B 45
Aluminium has a resistivity of 2.65 10-8 m. 1) The resistance of a piece of metal is directly proportional to the length and inversely proportional to the cross-sectional area. Explain how this can...
A student is trying to launch a 40g ball using a spring. This spring is initially compressed 0.05m with a spring constant of 20nm 1. When the student releases the spring, what is the velocity of the...
Angular position | Problem The equation below is the mathematical representation of the angular position of an object in rota-tional or circular motion with constant angular acceleration. Match each...
A 40 kg box is placed on a frictionless ramp at 20 to the horizontal. 1) Draw a diagram of this identifying the relevant forces: force due to gravity, forces normal and tangential to the ramp. (4...
You are designing an FSM to keep track of the mood of four students working in the digital design lab. Each students mood is either HAPPY (the circuit works), SAD (the circuit blew up), BUSY (working...
Planning: Creating an Audience Profile; Collaboration: Team Projects. Compare the Facebook pages of three companies in the same industry. Analyze the content on all available tabs. What can you...
a. Draw a budget line for Cameron, who has a monthly income of $100. Assume that he buys steak and potatoes, and that steak costs $10 per pound and potatoes cost $2 per pound. Add an indifference...
a. Draw a budget line for Rafaella, who has a weekly income of $30. Assume that she buys chicken and eggs, and that chicken costs $5 per pound while eggs cost $1 each. Add an indifference curve for...
a. Draw a budget line for Lynne, who has a weekly income of $225. Assume that she buys food and clothes, and that food costs $15 per bag while clothes cost $25 per item. Add an indifference curve for...
During the fall season, a retailer determined that in order to meet the next season's planned sales, the total amount of merchandise required next season was $360,000 at retail, with an initial...
Explore the role of collateralized debt obligations (CDOs) and collateralized loan obligations (CLOs) in securitizing and tranched collateralized credit exposures. How do structured finance vehicles,...
The faculty members from a local school voted to determine the winner of the "Student of the Year" award. The candidates were Ivanna, Tony, and Michael. The voting ballots are summarized in the...

If a speculator purchases $1 million worth of Swiss francs, and the United States subsequently devalues the

Question:

Step by Step Answer:

There is a gain of 250000 If 100 equals 2 Swiss francs before ...View the full answer

Basic Economics

Students also viewed these Economics questions