Assume that you are the cfo of a large company that has a lot of

Assume that you are the CFO of a large company that has a lot of cash, the CEO of the company wants to invest some the cash temporarily either in 90 days US treasury in dollars or 90 days French government security in Euro:

You are asked for advice and you are given the following information:

  • Let iNY = 90-day interest rate in New York.
  • Let iParis = 90-day interest rate in Paris.
  • Let E (e) = the expected spot rate in 90 days.

Read Chapter 14 of the textbook along with seven other peer reviewed publications and write a 5-7 APA standard formatted paper. Your paper must encompass the followings:

  • The variables to include in your report to the CEO of your company must demonstrate the most profitable investment for the company at the lowest risk.
  • The five steps of calculations in your textbook (Chapter 14) to be explained, put in notation, and be converted into a mathematical formula.
  • Your advice to the CEO must be based on:
  1. The interest rate differential between the two countries remains constant. 
  2. The current status of interest rates in the two countries will change.
  • Provide the equation that exhibits the state of equilibrium between the money market and the foreign exchange market in these two countries.
  • Explain why this equation represents the Interest Rate Parity theorem?
  • How you can persuade your CEO that the Interest Rate Parity theorem is a reliable tool in forecasting the Dollar/Euro parity at the maturity date.
  • Please provide some reasoning on how multinational corporations can use this theorem to mitigate the currency risk in their foreign business activities.
  • Provide data for Expected Dollar/Euro rates and interest rates on 90 days securities from any financial website and Federal Reserve website and demonstrate your reasoning numerically.







Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10