QUESTION 4 a) The Business and Financial Times currently has given the following quotes between e:S as: Spot-0.7200 -0.7250 1 month forward -0.0014 -0.0016 premium 1 month forward rate=0.7186 -0.7234 i. Your company currently has GH32,500 and wishes to import goods from America. Assuming you are the financial advisor of such company, what will be your advice? (2 Marks) ii. Should they import now or a month's time, assuming prices will remain constant? (2 Marks) b) Economist has always maintained that to increase inflation, the goverment ought to implement a policy of high interest rate to dampen demand. How will this statement impact on the economy of a policy of high interest rate on expenditure and investments in a given country of your choice? (6 Marks) c) For a business, it is not necessary that profit should be the only objective; it may concentrate on various aspects such as maximisation of share price, maximisation of sales, capturing more market shares, return on capital employed among others, which will take care of profitability. Examine why maximization of a company's share price is preferred as a financial objective to maximization of its sales. (6 Marks) d) Agency problem is pervasive and exists in practically every organization whether a business, church, club, or government . Organizations try to solve it by instituting measures but no organization can remedy it completely How would you analyse this statement within the context of a limited liability company and what are the possible remedies to this problem? (5 Marks) c) Suppose you have $ 1,000,000 and wish to speculate on the Swiss Franc. Current 90-day forward rate is SF 1.60/s. You believe that spot in 90- days will be SF 1.65/S. Is it possible for dealer to make an arbitrage profit? If yes, show how. If no, explain why (4 Marks) Total 25 Marks