Suppose that you have 2,300,000 VND that can be invested in the
US market for one year. Use the following information.
Today's spot exchange rate: $1 = 23,000 VND
Today's forward exchange rate: $1 = 24,000 VND
US market interest rate = 10%
Vietnamese market interest rate = 6%
Today, you invest your money in the US market and also take an
one-year forward contract with the forward exchange rate ($1 =
24,000 VND). So, you are supposed to convert USD into VND at the
forward exchange rate a year later.
a) Calculate your investment return (percentage return).
b) Based on your answer above, does the IRP hold? Why?
A project is expected to produce the following cash flows: 0 1 2 3 ------------------------------------------|----.................. -500 200 300 300 The project's cost of capital is 5%. Find the MIRR
Suppose that you have 2,300,000 VND that can be invested in the US market for one year. Use the following information. T
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