Why is the money given time value
Why is the money given time value?
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a) Positive interest rates show that the money has time value. If one person lets another person borrows money, the first will person need the compensation in exchange for dropping current consumption. b) The individual who has borrowed the money is ready to pay the increase current consumption. The return rate which is required for an investment shows the pure time value of money, any risk premiums present and an adjustment for expected inflation.
Assume that the treasurer of IBM contains an extra cash reserve of $1,000,000 to invest for six months. The six-month interest rate is 8% per annum in the U.S. and 6% per annum in Germany. Now, the spot exchange rate is DM1.60 per dollar and the six-month forw
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In integrated world financial market, a financial crisis in a country can be quickly transmitted to other countries, causing global crisis. What sort of measures would you suggest to stop the recurrence of Asia-type crisis? Discover Q & A Leading Solution Library Avail More Than 1434501 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads No hassle, Instant Access Start Discovering 18,76,764 1960374 Asked 3,689 Active Tutors 1434501 Questions Answered Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!! Submit Assignment
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