International Business Financial Mgmt. Use information from chart to answer problems. Must convert the foreign currency available at 11/6 into U.S. dollars at the spot rate as of 4/10

1. 2. 3. 4. 5. Assume that Nov. 6, 2015 is the maturity date of your six month foreign currency CD. You had converted USD100,000 into the foreign currency at the spot rate in effect at the time you did the transaction earlier in the semester. You know how much you now have as you had invested the foreign currency proceeds at the six month rate of interest then available. You are now going to convert the foreign currency available at 11/6 into U S dollars at the spot rate as of 4/10. How much, in dollars, did you make and what was your percentage return in dollars? What was the percent appreciation or depreciation of your chosen currency? How does your final position in dollars compare to what you would have made had you invested the USD100,000 at the then prevailing rate for six month dollar deposits (this is your benchmark return)? How does this compare with what you predicted you would make (based on your forecast of the spot rate at the maturity of your deposit)? With the knowledge you have gained from this course, is there anything you would have done differently? What would you have done and why? If you would not have done anything differently, why are you happy with the choice you made? Currency Selected Spot exchange rate 9/7/2015 6 month CD rate in ORK 6 month CD rate in USD Equivalent of USD 100,000 in ORK Total ORK on hand at end of 6 months Forecast exchange rate at maturity Expected USD proceeds at maturity Benchmark return Brazilian Real 3.809 10% .53% BR 380,900 BR 399,945 = (380900 x (1 + .10/2) 4.201 USD 95,202.33 = (399,945 /4.201) USD 100,265 = (100,000 x (1 + .0053/2) The above is what would have been submitted initially in part 1, together with any commentary on the rationale for choosing the currency and explanation of the forecast rate. This forms part of the Everbank Part 2 assignment you will now complete, EVERBANK Part II Actual spot rate at maturity, 11/10 Realized USD proceeds at maturity ???? ???? The remainder of the assignment addresses the questions above