Problem 17-02 Interest Rate Parity

The nominal yield on 6-month T-bills is 5%, while default-free Japanese bonds that mature in 6 months have a nominal rate of 4%. In the spot exchange market, 1 yen equals $0.005. If interest rate parity holds, what is the 6-month forward exchange rate? Round the answer to five decimal places. Do not round intermediate calculations.

Problem 17-03 Purchasing Power Parity

A computer costs $610 in the United States. The same model costs 720 euros in France. If purchasing power parity holds, what is the spot exchange rate between the euro and the dollar? Do not round intermediate calculations. Round your answer to two decimal places.

$1 = ? euros

Problem 17-04 Exchange Rate

If euros sell for $1.96 (U.S.) per euro, what should dollars sell for in euros per dollar? Round your answer to two decimal places.

? euros per dollar

Problem 16-02 Receivables Investment

Medwig Corporation has a DSO of 39 days. The company averages $8,000 in sales each day (all customers take credit). What is the company's average accounts receivable? Round your answer to the nearest dollar.

Problem 16-04 Cost of Trade Credit

A large retailer obtains merchandise under the credit terms of 1/20, net 35, but routinely takes 65 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's effective cost of trade credit? Assume 365 days in year for your calculations. Do not round intermediate calculations. Round your answer to two decimal places.