Question: please answer qustion 2 and 3. typed answer. thanks Show work and cite any sources used; submit in Word or Excel. 1. During the first
Show work and cite any sources used; submit in Word or Excel. 1. During the first half of 1990, Swiss government bonds yielded a local currency return of -1.6%; however, the Swiss franc rose by 8% against the dollar over this six-month period. Corresponding figures for France were 1.8% and 2.6%. Which bond earned the higher U.S. dollar return? 2. Suppose the euro is worth $1.3022. If one-year European bonds are yielding 3.1% and one- year U.S. Treasury bonds are yielding 2.5%, at what end-of-year exchange rate will the dollar return on the two bonds be equal? What amount of euro appreciation or depreciation does this equilibrating exchange rate represent? 3. A Thai bond with a coupon of 9.5% is initially priced at its face value of Bt1,000. At the end of one year, the bond is selling for Bt1,050. If the initial spot rate was Bt25, at what end-of- year exchange rate will the total dollar return on the bond just equal 10%? 4. Suppose the standard deviations of the British and U.S. stock markets have risen to 38% and 22%, respectively, whereas the correlation between the U.S. and British markets has risen to 0.67. What is the new beta of the U.S. market from the British perspective
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