Business, 11.11.2019 23:31 haleymoodie1998
In 1989 and 1990, the japanese company mitsubishi estate co. paid the rockefeller family $1.4 billion for an 80 percent stake in new york’s rockefeller center. at the time, the exchange rate was 145 ¥/$. when the investor went to sell the building five years later, in early 1995, the exchange rate was 85 ¥/$ and the property’s value had decreased to $800 million.
a. what exchange risk did mitsubishi estate face at the time of the purchase?
the risk of diminish profits due to the exchange rate change 5 years later when the building was sold.
b. how could mitsubishi estate have hedged his risk?
by requesting the payment in dollars so the risk of currency fluctuations is avoided
buy a spot contract since these contracts fix exchange rates against fluctuations
a. assume the purchase was $1.1 billion in total and that the value declines to $450 million. suppose the investor financed the purchase with a $100 million down payment in yen and a $1 billion dollar loan accumulating interest at the rate of 8% per annum. since this is a zero‐coupon loan, the interest on it (along with the principal) is not due and payable until the building is sold. how much has the investor lost in yen terms? in dollar terms?
b. suppose the investor financed the building with a $100 million down payment in yen and a yen loan for the remaining amount accumulating interest at the rate of 3% per annum. since this is a zero‐coupon loan, the interest on it (along with the principal) is not due and payable until the building is sold. how much has the investor lost in yen terms? in dollar terms?
Answers: 1
Business, 21.06.2019 21:30, Brandonjr12
In a macroeconomic context, what are implicit liabilities? money owed to people possessing government issued bonds. the amount of money that firms collectively owe to shareholders. money that the government has promised to pay in the future. payments that the federal government undertakes only during periods of recession. which of the choices is a significant implicit liability in the united states? military spending education spending national science foundation spending social security
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Business, 21.06.2019 22:30, tinasidell1972
Your project team’s recommendations to increase productivity have been approved and your team is now working on an implementation plan. in order to accomplish the plan, several subject matter experts from various parts of the organization have been brought in to assist. you have noticed friction and conflict among team members. some of the disagreement and opposition on your team supports the achievement of team goals and objectives. this type of conflict can be described as:
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