You are considering two job offers, one in Switzerland and one in France. The position in...
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You are considering two job offers, one in Switzerland and one in France. The position in Switzerland pays CHF81,400 per year. The price level for a basket of goods in Switzerland is CHF15,565 and EUR17,121 for an equivalent basket of goods in France. The current spot rate is CHF0.9786/EUR. Assume that you are otherwise indifferent between these two locations. How much would the job in France need to pay you to make you equally well off as the job in Switzerland? a. EUR74,002 O b. EUR79,658 O c. EUR89,537 d. EUR90,630 e. EUR83,180 You are the financial manager for Black Mesa Research, which is headquartered in Switzerland. You have received the below spot and interest rates quotes from your bank: Spot exchange rate Interest rate for NZD Interest rate for CHF Bid NZD 0.7478/CHF a. NZD 0.7715/CHF O b. NZD 0.7284/CHF O c. NZD 0.7249/CHF d. NZD 0.7769/CHF e. NZD 0.7478/CHF f. NZD 0.7677/CHF 4.30% 1.10% Ask NZD 0.7516/CHF 4.50% 1.60% Suppose that Black Mesa Research has a receivable in NZD in one year's time and they wish to engage in a hedge to lock in their domestic (i.e. Swiss franc) currency equivalent of its value. Black Mesa Research intends to achieve this by using their bank's spot rates and money market interest rates in order to create a synthetic forward contract. What is the effective forward exchange rate that Black Mesa Research is able to achieve for hedging the CHF value of their NZD receivable? You are considering two job offers, one in Switzerland and one in France. The position in Switzerland pays CHF81,400 per year. The price level for a basket of goods in Switzerland is CHF15,565 and EUR17,121 for an equivalent basket of goods in France. The current spot rate is CHF0.9786/EUR. Assume that you are otherwise indifferent between these two locations. How much would the job in France need to pay you to make you equally well off as the job in Switzerland? a. EUR74,002 O b. EUR79,658 O c. EUR89,537 d. EUR90,630 e. EUR83,180 You are the financial manager for Black Mesa Research, which is headquartered in Switzerland. You have received the below spot and interest rates quotes from your bank: Spot exchange rate Interest rate for NZD Interest rate for CHF Bid NZD 0.7478/CHF a. NZD 0.7715/CHF O b. NZD 0.7284/CHF O c. NZD 0.7249/CHF d. NZD 0.7769/CHF e. NZD 0.7478/CHF f. NZD 0.7677/CHF 4.30% 1.10% Ask NZD 0.7516/CHF 4.50% 1.60% Suppose that Black Mesa Research has a receivable in NZD in one year's time and they wish to engage in a hedge to lock in their domestic (i.e. Swiss franc) currency equivalent of its value. Black Mesa Research intends to achieve this by using their bank's spot rates and money market interest rates in order to create a synthetic forward contract. What is the effective forward exchange rate that Black Mesa Research is able to achieve for hedging the CHF value of their NZD receivable?
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