英文版羅斯公司理財習題答案Chap020

1、胺CHAPTER斑 半20凹INTERNA霸TIONAL 芭CORPORA板TE FINA靶NCE稗Answers板 to Con昂cepts R敖eview a矮nd Crit埃ical Th芭inking 頒Questio跋ns敖1.靶擺 a.拔藹The dol頒lar is 盎selling凹 at a p愛remium 搬because挨 it is 笆more ex扮pensive敗 in the芭 forwar伴d marke皚t than 絆in the 藹spot ma絆rket (S靶Fr 1.53扮 versus啊 SFr 1.盎50).班哎b.芭拌The fra啊nc i

2、s e辦xpected吧 to dep昂reciate罷 relati邦ve to t挨he doll哎ar beca般use it 佰will ta凹ke more疤 francs佰 to buy哀 one do氨llar in唉 the fu柏ture th百an it d扒oes tod半ay.啊熬c.柏埃Inflati岸on in S傲witzerl扒and is 罷higher 八than in襖 the Un把ited St鞍ates, a敗s are 捌nominal埃 稗interes板t rates壩.班2.岸哎The exc奧hange r鞍ate wil哎l incre拌

3、ase, as奧 it wil捌l take 芭progres靶sively 拜more pe唉sos to 班purchas隘e a dol凹lar. Th案is is t癌he rela絆tive PP骯P relat隘ionship盎.隘3.唉班a.般矮The Aus辦tralian胺 dollar爸 is exp捌ected t拜o weake罷n relat叭ive to 版the dol藹lar, be扮cause i耙t will 暗take mo扒re A$ i挨n the f暗uture t扒o buy o翱ne doll笆ar than澳 it doe藹s today艾.笆

4、隘b.埃八The inf佰lation 骯rate in岸 扳Austral安ia叭 is hig哎her.啊般c.背翱Nominal辦 intere懊st rate翱s in 傲Austral疤ia敖 are hi巴gher; r絆elative吧 real r跋ates in敗 the tw瓣o count板ries ar伴e the s拔ame.礙4.昂邦A Yanke霸e bond 扳is most拜 accura懊tely de鞍scribed澳 by 壩d胺.瓣5.瓣礙No. For懊 exampl百e, if a藹 countr扮ys cur拌rency s阿trength柏en

5、s, im敗ports b瓣ecome c昂heaper 襖(good),扳 but it皚s expor吧ts beco扳me more吧 expens扳ive for昂 others疤 to buy鞍 (bad).敖 The re搬verse i巴s true 鞍for 艾currenc昂y般 deprec拔iation.班6.挨皚Additio隘nal adv斑antages耙 includ岸e being鞍 closer翱 to the頒 final 唉consume暗r and, 奧thereby搬, savin版g on tr傲ansport翱ation, 霸signifi暗can

6、tly 背lower w罷ages, a伴nd less熬 exposu半re to e班xchange辦 rate r芭isk. Di霸sadvant壩ages in拔clude p翱olitica按l risk 按and cos哀ts of s柏upervis稗ing dis傲tant op霸eration八s.盎7.柏板One key吧 thing 扮to reme愛mber is捌 that d暗ividend扳 paymen案ts are 埃made in百 the ho癌me curr傲ency. M罷ore gen癌erally,盎 it may般 be tha把t the o愛

7、wners o般f the m熬ultinat懊ional a隘re prim八arily d隘omestic背 and ar罷e ultim版ately c拌oncerne啊d about暗 their 版wealth 罷denomin瓣ated in叭 their 吧home cu盎rrency 隘because哀, unlik半e a mul巴tinatio挨nal, th藹ey are 敖not int半ernatio艾nally d跋iversif啊ied.埃8.胺搬a.鞍耙False. 唉If pric百es are 安rising 愛faster 疤in 吧Great B扳rit

8、ain襖, it wi啊ll take盎 more p芭ounds t稗o buy t百he same罷 amount爸 of goo愛ds that襖 one do絆llar ca跋n buy; 盎the pou伴nd will艾 deprec皚iate re瓣lative 拌to the 辦dollar.拌皚b.凹頒False. 傲The for白ward ma吧rket wo氨uld alr搬eady re拔flect t拜he proj笆ected d扳eterior耙ation o瓣f the 頒euro熬 relati爸ve to t拜he doll艾ar. Onl案y if yo

9、唉u feel 熬that th柏ere mig佰ht be a襖ddition扳al, una板nticipa捌ted wea叭kening 疤of the 柏euro柏 that i八snt re礙flected把 in for板ward ra骯tes tod艾ay扳,昂 will t隘he forw隘ard hed敗ge prot白ect you暗 agains扮t addit挨ional d佰eclines昂.哎隘c.扮藹True. T熬he mark邦et woul吧d only 叭be corr氨ect on 版average般, while笆 you wo擺uld be 藹cor

10、rect扒 all th哀e time.傲9.挨啊a.般半America霸n expor罷ters: t氨heir si愛tuation胺 in gen敖eral im扮proves 邦because矮 a sale敖 of the暗 export爸ed good邦s for a瓣 fixed 隘number 柏of 八euros白 will b阿e worth半 more d芭ollars.皚耙耙America吧n impor哀ters: t笆heir si跋tuation頒 in gen敗eral wo隘rsens b骯ecause 熬the pur熬chase o襖f the i盎mpo

11、rted伴 goods 半for a f壩ixed nu昂mber of昂 柏euros鞍 will c斑ost mor啊e in do盎llars.版阿b.絆埃America叭n expor埃ters: t半hey wou絆ld gene斑rally b艾e bette隘r off i熬f the B藹ritish 壩governm阿ents i皚ntentio笆ns resu襖lt in a笆 streng爸thened 半pound.敗皚礙America熬n impor搬t(yī)ers: t盎hey wou笆ld gene傲rally b背e worse鞍 off if捌 the po凹und

12、 str扳engthen斑s.安扳c.八矮America柏n expor礙ters: 把they 岸would g安enerall案y be mu氨ch wors白e off, 背because班 an ext疤reme ca稗se of f藹iscal e靶xpansio癌n like 昂this on瓣e will 愛make Am般erican 礙goods p氨rohibit把ively e霸xpensiv捌e to bu拔y, or e叭lse Bra霸zilian 版sales, 絆if fixe埃d in cr矮uzeiros啊, would暗 become敗 worth 骯an

13、 unac搬ceptabl奧y low n俺umber o班f dolla壩rs.埃昂芭America捌n impor壩ters: 百they 柏would g皚enerall案y be mu壩ch bett斑er off,靶 becaus扮e Brazi疤lian go百ods wil凹l becom敗e much 埃cheaper拜 to pur癌chase i俺n dolla懊rs.澳10.敗傲IRP is 澳the mos辦t likel襖y to ho拌ld beca敖use it 哎present扒s the e背asiest 芭and lea吧st cost絆ly mean拔s

14、to ex叭ploit a把ny arbi斑trage o澳pportun哀ities. 氨Relativ阿e PPP i皚s least扳 likely啊 to hol皚d since叭 it dep半ends on阿 the ab把sence o哀f marke拌t imper叭fection板s and f骯riction岸s in or凹der to 罷hold st岸rictly.吧11.礙版It all 擺depends耙 on whe背ther th班e forwa板rd mark擺et expe拔cts the盎 same a傲pprecia疤tion ov艾er the 皚p

15、eriod 挨and whe霸ther th疤e expec跋tation 拌is accu挨rate. 凹Assumin凹g that 柏the exp頒ectatio哎n is co捌rrect a跋nd that俺 other 按traders芭 do not疤 have t扮he same柏 inform背ation, 班there w柏ill be 拜value t背o hedgi班ng the 霸currenc安y expos扒ure.襖12.氨爸One pos俺sible r皚eason i辦nvestme俺nt in t伴he fore隘ign sub爸sidiary愛 mig

16、ht 佰be pref把erred i叭s if th按is inve柏stment 百provide柏s direc半t diver襖sificat瓣ion tha耙t share邦holders隘 could 澳not att胺ain by 巴investi捌ng on t巴heir ow瓣n. Anot拌her rea骯son cou伴ld be i俺f the p澳olitica辦l clima邦te in t挨he fore胺ign cou跋ntry wa百s more 擺stable 耙than in把 the ho罷me coun澳try. In氨creased把 politi鞍

17、cal ris稗k can a唉lso be 爸a reaso跋n you m捌ight pr胺efer th般e home 愛subsidi罷ary inv岸estment熬. Indon疤esia ca辦n serve霸 as a g班reat ex胺ample o扳f polit隘ical ri扳sk. If 藹it cann懊ot be d扒iversif稗ied awa熬y, inve笆sting i版n this 氨type of捌 foreig艾n count頒ry will百 increa罷se the 癌systema懊tic ris氨k. As a佰 result隘, it

18、 wi矮ll rais皚e the c哎ost of 巴the cap翱ital, a捌nd coul搬d actua罷lly dec癌rease t靶he NPV 半of the 癌investm敗ent.背13.捌拌Yes, th拜e firm 板should 絆underta斑ke the 百foreign懊 invest捌ment. 拔If, aft襖er taki疤ng into艾 consid翱eration懊 all ri澳sks, a 叭project襖 in a f扮oreign 叭country骯 has a 瓣positiv矮e NPV, 隘the fir挨m shoul

19、白d under佰take it白. Note澳 that i笆n pract扒ice, th巴e state伴d assum霸ption (般that th扮e adjus俺tment t拜o the d叭iscount安 rate h鞍as take把n into 俺conside壩ration 敗all pol安itical 矮and div愛ersific把ation i辦ssues) 百is a hu胺ge task盎. But 跋once th霸at has 骯been ad斑dressed背, the n壩et pres捌ent val啊ue prin伴ciple h挨olds

20、fo百r forei安gn oper艾ations,稗 just a胺s for d巴omestic挨.愛14.唉扳If the 敖foreign柏 curren辦cy depr吧eciates半, the U骯.S. par把ent wil矮l exper般ience a昂n excha澳nge rat安e loss 奧when th愛e forei擺gn cash辦 flow i絆s remit啊ted to 挨the U.S拌. This愛 proble熬m could吧 be ove澳rcome b澳y selli斑ng forw暗ard con癌tracts.昂 Anoth柏er w

21、ay 案of over骯coming 吧this pr巴oblem w隘ould be澳 to bor懊row in 伴the cou叭ntry wh隘ere the斑 projec拜t is lo罷cated.板15.扒辦False. 頒If the 版financi般al mark凹ets are啊 perfec班tly com叭petitiv半e, the 般differe辦nce bet扒ween th隘e Eurod板ollar r絆ate and頒 the U.胺S. rate艾 will b阿e due t百o diffe扒rences 半in risk叭 and go矮vern

22、men版t regul跋ation. 案 Theref扒ore, sp埃eculati澳ng in t絆hose ma靶rkets w板ill not芭 be ben阿eficial艾.敗16.壩昂The dif矮ference懊 betwee笆n a Eur白obond a澳nd a fo頒reign b啊ond is 背that th壩e forei暗gn bond挨 is den按ominate胺d in th爸e curre笆ncy of 吧the cou矮ntry of霸 origin熬 of the胺 issuin礙g compa隘ny. Eur骯obonds 稗are mor白e

23、 popul凹ar than邦 foreig芭n bonds巴 becaus澳e of re愛gistrat擺ion dif疤ference八s. Euro般bonds a奧re unre拜gistere澳d secur巴ities.搬Solutio埃ns to Q熬uestion襖s and P稗roblems搬NOTE: A跋ll end-頒of唉-盎chapter哎 proble絆ms were八 solved暗 using 熬a sprea八dsheet.敖 Many p班roblems氨 requir辦e multi爸ple ste背ps. Due跋 to spa把ce and 頒r

24、eadabi叭lity co矮nstrain擺ts, whe版n these把 interm壩ediate 般steps a挨re incl版uded in暗 this s背o扮lutions矮 manual芭, round巴ing may搬 appear伴 to hav白e occur案red. Ho暗wever, 愛the fin扮al answ暗er for 昂each pr拌oblem i扒s found鞍 withou斑t round爸ing dur拔ing any哎 step i霸n the p罷roblem.Basic半1.耙柏Using t斑he quot罷es from稗 t

25、he ta白ble, we拔 get:俺柏a.柏壩$骯5襖0(藹0.跋7870埃/$1) = 板疤39.35凹拜b.霸敖$頒1.2706阿疤c.骯稗5M($哀1.2706盎/) = $啊6,耙353,240瓣般d.愛瓣New Zea昂land艾 dollar按暗e.盎邦Mexican鞍 peso伴芭f.擺耙(敖P11.壩0023傲/$1)($霸1.2186矮/1) = 艾P斑13.吧9801叭/ 八敖斑T埃his is 奧a cross伴 rate.敖懊g.鞍頒The m扳ost val般uable岸 is the襖 皚Kuwait笆 暗d叭inar拜. The l斑east艾 valuab捌

26、le班 is the懊 啊Indones骯ian rup按iah礙. 把2.傲扮a.奧按You wou啊ld pref板e傲r 襖100, s隘ince爸:吧罷盎 (100)凹($叭.5359隘/1) = 啊$皚5斑3.59哀板b.熬扮You wou捌ld stil半l prefe埃r 100.靶 Using 矮the $/拔 exchan斑ge rate癌 and th礙e SF/ 瓣exchang氨e rate 跋to find霸 the am吧ount of熬 Swiss 氨francs 敖100 wi板ll buy,板 we get耙:叭鞍埃(昂100)($班1.8660佰/1)(伴S

27、八F吧 扒.8盎233哀) = 襖S背F 佰226.648壩9襖骯c.拌哎Using t奧he quot案es in t爸he book澳 to fin扒d the S白F/ cro扳ss rate跋, we fi扒nd:傲百暗(拔S藹F 熬1.2146捌/$1)($擺0.5359斑/1) = 背S按F 把2.2665鞍/1 隘八骯The /S邦F excha懊nge rat扳e is th拔e inver搬se of t拜he SF/哎 exchan鞍ge rate耙, so:搬叭案凹1/藹SF隘 懊.埃4412邦 = 白0.4412哎/隘S跋F 1半3.疤扮a.岸案F八180扳 = 八10

28、艾4.93白 (per $傲). The 八yen is 鞍selling搬 at a p百remium 骯because氨 it is 辦more ex扒pensive昂 in the俺 forwar霸d marke按t than 扒in the 扳spot ma哀rket ($邦0.00拔9阿3659敖 versus藹 $0.00擺9骯530笆).唉辦b.柏白F跋90疤 = $稗1.8587澳/敗捌. The 安pound懊 is sel骯ling at拜 a 盎discoun啊t斑 becaus背e it is艾 礙less白 expens癌ive in 班the for昂ward ma

29、懊rket th拔an in t凹he spot吧 market鞍 (辦$0.案5380把 versus昂 癌$0.暗5359胺).捌拔c.罷襖The val挨ue of t邦he doll疤ar will吧 fall r骯elative埃 to the般 yen, s把ince it佰 takes 邦more do斑llars t擺o buy o敗ne yen 氨in the 搬future 襖than it扮 does t斑oday. T叭he valu半e of th半e dolla拜r will 扮rise re矮lative 艾to the 般pound擺, becau佰se it

30、w扳ill tak按e fewer般 dollar鞍s to bu爸y one 把pound敗 in the阿 future跋 than i壩t does 翱today.敗4.跋拔a.啊拜The U.S瓣. dolla白r, sinc奧e壩 one Ca把nadian 埃dollar 佰will bu襖y:隘 安吧頒(Can$1)襖/(Can$1半.板26八/$1) = 氨$0.7隘937擺伴b.拔耙The cos笆t in U.白S. doll扮ars is:哀矮隘(Can$2.唉19)/(Ca背n$1.百26昂/$1) = 伴$1.胺74疤 般阿哀Among t盎he reas頒ons t

31、ha隘t absol爸ute PPP把 doesn隘t hold 百are tar笆iffs an叭d other拜 barrie敖rs to t拜rade, t擺ransact芭ions co般sts, ta般xes, an搬d diffe胺rent ta熬stes.佰巴c.阿安The U.S艾. dolla安r is se頒lling a班t a dis安count, 哎because熬 it is 白less ex拔pensive阿 in the頒 forwar擺d marke凹t than 矮in the 隘spot ma埃rket (C岸an$1.2霸2百 versus安 Can$1

32、.鞍26稗).礙胺d.癌斑The Can班adian d邦ollar i挨s expec礙ted to 頒appreci班ate in 艾value r壩elative愛 to the擺 dollar澳, becau班se it t藹akes fe把wer Can把adian d吧ollars 八to buy 唉one U.S哎. dolla般r in th安e futur搬e than 埃it does柏 today.敗哀e.哎捌Interes斑t rates爸 in the叭 伴United 熬States啊 are pr拔obably 伴higher 艾than th氨ey are 邦i

33、n 耙Canada耙.百5.氨唉a.吧挨The cro矮ss rate凹 in /奧 terms 瓣is:傲壩扮(11伴5拌/$1)($1拜.佰7奧0/1) =阿 1哎9霸5.5跋/1伴拜b.扒敖The yen半 is quo伴ted too昂 low re懊lative 背to the 拌pound. 癌Take ou拔t a loa埃n for $瓣1 and b白uy 11頒5挨. Use t扮he 11邦5爸 to pur唉chase p藹ounds a壩t the c百ross-ra班te擺, which版 will g扮ive you絆:壩哀懊斑11俺5襖(1捌/笆絆1凹85澳)愛

34、 = 0.巴6216扮 澳斑辦Use the巴 pounds笆 to buy傲 back d擺ollars 稗and rep盎ay the 板loan扳. The c挨ost to 巴repay絆 the 礙loan爸 will b拌e:壩芭愛0.6扮216柏(澳$搬1.藹70愛/1氨) = $1.版0568安 瓣翱稗You arb按itrage 奧profit 班is 拌$0.0568捌 per do昂llar us凹ed.斑6.芭板We can 疤rearran巴ge the 稗interes把t rate 吧parity 辦conditi懊on to a半nswer t百his que襖

35、stion. 安The equ埃ation w哀e will 百use is:擺叭R暗FC芭 = (F背T安 敖 S版0爸)/S岸0百 + R頒US礙案Using t哎his rel啊ationsh百ip, we 艾find:扳按Great 藹Britain唉: 翱壩R盎FC埃 = (伴0.5敗394巴 阿0.5半359氨)/澳0.5敗359擺 + .0傲38扮 = 艾4.45矮%吧邦Japan: 澳扮R骯FC佰 = (襖10岸4.93百 把10班6.77搬)/1百0懊6.77芭 + .0半38俺 = 班2.08百%佰昂Switzer岸land:捌罷R凹FC傲 = (SFr昂 1.挨1980半

36、 SFr 瓣1.昂2吧146襖)/SFr 1芭.凹2百146奧 + .0鞍38奧 = 爸2.43安%靶7.哀半If we i敗nvest i阿n the 胺U.S. 笆for the捌 next t般hree mo傲nths, w艾e will 襖have:昂絆 $30M(1癌.004俺5班)靶3案 = $30,礙406,825埃.23皚傲If we i敖nvest i礙n Great按 板Britain敗, we mu癌st exch愛ange th阿e dolla盎rs toda頒y for p翱ounds, 拜and exc熬hange t愛he 搬pounds俺 for do拔llar

37、s i斑n three胺 months胺. After扒 making隘 these 柏transac絆tions, 安the dol絆lar amo盎unt we 唉would h安ave in 稗three m爸onths w捌ould be骯: 安班($30M)(阿0.5版6八/$1)(1.傲00熬6絆0)笆3哎/(0.辦59芭/$1) = 暗$2唉8,990,2佰00.05罷 疤半We shou斑ld 胺invest 啊in U.S.扳8.疤擺Using t敖he rela氨tive 俺purchas扮ing氨 power 懊parity 搬equatio哀n:瓣捌F傲t俺 = S昂0

38、安 1 +敖 (h絆FC叭 h挨US把)隘t唉 皚案We find捌:愛般Z3.92百 = 巴Z3.84哎壩1 + 伴(跋h疤FC捌 h巴US版)按壩3半 凹罷h骯FC把 h巴US伴 = 埃(擺Z敗3.92傲/白Z捌3.84跋)扳1/3按 1 爸扒h擺FC岸 h艾US跋 擺= .0吧069啊盎Inflati霸on in 愛Poland唉 is exp扒ected t叭o excee班d that 伴in the 板U.S. by矮 埃0.69壩% over 跋this pe岸riod.藹9.傲佰The pro岸fit wil百l be th暗e 班quantit哀y芭 sold, 邦times

39、 t擺he sale愛s price白 minus 叭the cos按t of pr矮oductio唉n. The 藹product癌ion cos頒t is in耙 Singap熬ore dol挨lars, s版o we mu昂st conv礙ert thi拜s to U澳.拔S拔.絆 dollar昂s. Doin矮g so, w拔e find 伴that if俺 the ex頒change 背rates s辦tay the安 same, 伴the 隘profit白 will b把e:藹阿P扒rofit =傲 30,000把$拌145伴 (S$扳168.5跋0)/(S$佰1.6548巴/$1

40、) 癌哎Profit 巴= $1,骯295,250拔.18懊叭If the 壩exchang叭e rate 藹rises, 背we must靶 adjust辦 the co版st by t奧he incr背eased e百xchange瓣 rate, 扳so:哀耙P俺rofit =艾 30,000胺$笆145藹 (S$唉168.5暗0)/1.1(壩S$矮1.6548挨/$1) 艾傲Profit 把= $1,艾572,954氨.71傲斑If the 般exchang背e rate 稗falls, 爸we must白 adjust奧 the co阿st by t凹he decr版eased e礙x

41、change敗 rate, 笆so:稗疤P跋rofit =半 30,000扒$挨145瓣 (S$邦168.5邦0)/0.9(挨S$拌1.6548邦/$1) 爸盎Profit 敖= $955,扒833.53搬埃To calc癌ulate t捌he brea耙keven c愛hange i礙n the e愛xchange霸 rate, 搬we need凹 to fin懊d the e笆xchange凹 rate t翱hat mak巴e the c安ost in 藹Singapo柏re doll疤ars equ盎al to t扮he sell絆ing pri邦ce in 拔U.S. 背dollars

42、搬, so:絆啊$敖145哎 = S$八168.5巴0/S盎T拔 叭拔S哀T懊 = S$1.搬1岸621啊/$1 礙柏S罷T奧 癌= 哎.跋2978皚 or 捌百29.78板% decli岸ne敗10.哀瓣a.板癌If IRP 敖holds, 壩then吧:靶巴翱F八180愛 = (笆Kr翱 翱6.43氨)1 + (礙.08 .拔05)矮1/2安 俺笆安F半180壩 敗= 敗Kr扮 罷6.5257跋啊扮Since g哎iven F扮180啊 斑is白 啊Kr6.56背, an ar俺bitrage頒 背opportu俺nity 凹exists;靶 the fo佰rward p頒remium 疤

43、is too 矮high.胺 扮Borrow 瓣Kr笆1 today氨 at 8% 百interes岸t. Agre巴e to a 案180-day艾 forwar胺d contr搬act at 啊Kr叭 半6.56礙. Conve壩rt the 昂loan pr扒oceeds 氨into敖 dollar版s矮:俺靶俺Kr案 1啊 啊(安$1/熬Kr鞍 芭6.43敗)翱 = $0.斑15552巴 版 骯瓣耙I艾nvest t搬hese do暗llars a稗t 5%, e靶nding u矮p with 胺$0.跋15931艾. Conve吧rt the 百dollars搬 back i埃nto

44、 拔krone耙 a霸s皚拜白$俺0.頒15931拜(板Kr礙 艾6.56邦/$1) = 捌Kr拜 1.0巴4506傲 皚氨傲Repay t熬he 板Kr鞍 1 loan板, endin捌g with 暗a profi凹t of巴:艾版罷Kr1隘.0瓣4506熬 熬Kr頒1.03傲868癌 = 傲Kr板 0.0把0638礙埃b.懊擺To find拜 the fo爸rward r疤ate tha拌t 氨elimina叭tes熬 arbitr靶age, we凹 use th案e inter佰est rat般e parit罷y condi扮tion, s靶o:拌拌般F昂180頒 = (背Kr敖 拜6

45、.43佰)1 + (岸.08 .熬05)翱1/2巴 頒藹壩F埃180八 絆= 版Kr癌 捌6.5257斑11.懊懊The int骯ernatio跋nal Fis笆her eff岸ect sta叭tes tha骯t the r熬eal int哀erest r伴ate acr耙oss cou安ntries 拜is equa昂l. We c叭an rear礙range t扒he inte壩rnation靶al Fish隘er effe頒ct as f鞍ollows 氨to answ熬er this按 questi叭on: 八扮R藹US扮 h柏US挨 = R襖FC傲 h鞍FC班 艾襖h敗FC凹 = R

46、白FC暗 + h班US吧 R巴US斑百a.安敖h班AUS暗 = .05 半+ .03把5凹 .03霸9凹 板把芭h敗AUS哀 懊= 班.046 or翱 傲4.敗6扮%伴扳b.隘拔h俺CAN叭 = .07 板+ .03吧5翱 .03擺9癌 襖罷凹h俺CAN艾 芭= 跋.066 or澳 艾6.皚6胺%捌八c.瓣啊h岸T暗AI澳 = .10 奧+ .03皚5班 .03霸9癌 邦辦八h霸TAI藹 案= 襖.096 or懊 俺9.耙6疤%邦12.扳伴a.骯斑The yen哀 is exp拜ected t百o get s佰tronger把, since柏 it wil鞍l(fā) take 暗fewer y俺en

47、 to b把uy one 耙dollar 般in the 凹future 按than it昂 does t捌oday.稗盎b.爸礙h板US阿 h俺JAP瓣 佰 (12埃9.76敖 1扳31.30靶)/1把31.30敗 擺扒阿h般US岸 h岸JAP柏 翱= .01壩17傲 癌or 1.1隘7%扒笆壩(1 .0百1百17背)矮4耙 1 = 盎.0盎461安 or 4.壩61%胺懊岸The app拌roximat白e infla拌tion di背fferent熬ial bet唉ween th芭e U.S. 般and Jap隘an is 埃 案4.61版% annua跋lly.疤13.背皚We nee

48、d俺 to fin襖d the c吧ha哎nge in 瓣the exc拔hange r八ate ove唉r time耙,白 so we 阿need to按 use th爸e relat拌ive pur百chasing癌 power 骯pa板r搬ity rel敗ationsh盎ip扒:百扮F熬t安 = S柏0柏 1 +凹 (h懊FC壩 h昂US霸)凹T奧 熬瓣Using t佰his rel翱ationsh懊ip, we 靶find th叭e excha矮nge rat跋e in on稗e year 胺should 把be:襖澳F辦1懊 = 2暗15拜俺1 + (.暗086扮 .035伴)安絆1

49、癌 傲邦F骯1扮 按= HUF 2暗25.97搬佰The exc拜hange r骯ate in 板two yea霸rs shou白ld be:班斑F矮2捌 = 2八15半擺1 + (.靶086挨 .035藹)襖跋2癌 盎隘F芭2藹 矮= HUF 辦237.49盎襖And the矮 exchan百ge rate暗 in fiv板e years鞍 should昂 be:凹翱F艾5熬 = 2霸15艾哀1 + (.愛086澳 .035霸)按擺5俺 笆敗F稗5百 澳= HUF 擺275.71奧14.懊矮Using t襖he inte笆rest-ra疤te pari澳ty theo隘rem:搬案(1 +

50、R安US扒) / (1 岸+ R霸FC邦) = 爸F盎(0,1) /俺 S把0敗扒We can 搬find th擺e forwa把rd rate爸 as:扮安F靶(0,1) =辦 (1 + 扒R艾US佰) / (1 跋+ R邦FC斑) S昂0佰阿F吧(0,1) =般 (1.13 鞍/ 1.08)白$1.50/礙白F昂(0,1) =伴 $1.57/芭按哀Interme佰diate霸15.案芭First, 阿we need斑 to for熬ecast t懊he futu翱re spot擺 rate f頒or each皚 of the版 next t般hree ye澳ars. Fr凹om inte哀

51、rest ra稗te and 哎purchas壩ing pow澳er pari拌ty, the唉 expect辦ed exch奧ange ra俺te is:版笆E(S擺T吧) = 盎(1 + R拌US挨) / (1 愛+ R唉FC愛)拌T暗 S版0So:芭搬E(S跋1拌) = 拔(1.0480愛 / 1.04敗10奧)耙1暗 $1.22/拜 = $1.柏2282/佰鞍E(S埃2奧) = 霸(1.0480絆 / 1.04氨10澳)百2骯 $1.22/稗 = $1.絆2365/爸白E(S般3昂) = 熬(1.0480敖 / 1.04叭10疤)案3伴 $1.22/百 = $1.扮2448/敗骯Now

52、 we 扮can use鞍 these 佰future 翱spot ra皚tes to 柏find th哀e dolla爸r cash 絆flows. 哀The dol矮lar cas柏h flow 靶each ye愛ar will藹 be:安襖Year 0 埃cash fl板ow = 扳$12,00百0,000($佰1.22/)笆 巴罷= $14,芭640,000板.00哎盎Year 1 笆cash fl暗ow = 把$2,700胺,000($1跋.2282/耙) 皚藹= $3,31艾6,149.8澳6熬芭Year 2 把cash fl哎ow = 把$3,500敖,000($1巴.2365/

53、笆) 把隘= $4,32霸7,618.6笆3絆巴Year 3 耙cash fl澳ow = (拔3,300,挨000 + 7暗,400,00板0)($1.2版448/) 奧靶= $癌13,319,阿111.90盎扒And the柏 NPV of靶 the pr靶oject w藹ill案 be:擺頒NPV = 背$14,640吧,000 + 唉$3,316,敗149.86/白1.1般3愛 + $4,4斑327,618爸.63/1.1骯3骯2癌 + $巴13,319,板111.90挨/1.1靶3藹3扒胺NPV = $岸914,618襖.73癌1般6唉.皚絆a.佰靶Implici靶tly, it俺 i

54、s ass安umed th版at inte斑rest ra岸tes won稗t chan熬ge over半 the li巴fe of t拜he proj板ect, bu擺t the e唉xchange傲 rate i按s proje藹cted to藹 declin凹e becau啊se the 敗Euroswi懊ss rate安 is low壩er than把 the Eu埃rodolla唉r rate.昂扳b.絆背We can 暗use rel澳ative p霸urchasi叭ng powe巴r parit百y to ca搬lculate稗 the do伴llar ca板sh flow哀s

55、at ea捌ch time半. The e扳quation絆 is:拌皚案ES傲T挨 = (SF阿r 1.翱72暗)礙般1 + (.0背7傲 .0佰8按)班百T伴 百骯唉ES澳T啊 芭= 哀1.72扒(.99)案T伴 哀哎So, the鞍 cash f跋lows ea愛ch year襖 in U瓣.敗S岸.啊 dollar佰 terms 盎will be艾:拔唉敖t凹凹SFr哀笆ES白T懊吧拜US埃$敗翱0吧搬白27傲.0白M奧愛1.凹72柏00澳俺$凹15,697,罷674.42翱阿1扒柏+哎7.5襖M按百1.骯7028瓣扮$扒4,404,5案10.22奧搬2柏捌+吧7.5瓣M盎爸1.邦68

56、58斑安 $壩4,449,0斑00.22挨奧3澳靶+安7.5瓣M挨背1.半6689盎爸$敖4,493,9拜39.62般扮4隘哎+壩7.5斑M盎安1.敗6522隘半$傲4,539,3凹32.95敗擺5擺扮+辦7.5扮M癌鞍1.阿6357稗扳$挨4,585,1般84.79挨巴澳And the絆 NPV is扒:拔懊癌NPV = 啊$艾15,697,癌674.42懊 + $扒4,404,5案10.22矮/1.13 +壩 $扒4,449,0捌00.22擺/1.13昂2邦 + $瓣4,493,9昂39.62瓣/1.13熬3稗 +拌笆傲阿唉$凹4,539,3敖32.95擺/1.13背4芭 + $氨4,585,1笆8襖4礙.79昂/1.13按5胺澳般NPV = $藹71,580.笆10拜傲c.伴稗Rearran挨ging th笆e relat芭ive pur藹chasing盎 power 絆parity 盎equatio霸n to fi胺nd