1 a us firms uk subsidiary borrowed pound1000000 three, Ask an Expert

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1. A US firms UK Subsidiary borrowed £1,000,000 three years ago that it must now repay. The spot exchange rate was £.75/$ when the money was borrowed however the dollar has since appreciated to £.85/$. What has been the change in the dollar cost of repaying this loan?

A. A Reduction of $156,862

B. A Increase of $156,862

C. A Reduction of $100,000

D. A Increase of $100,000

2. Suppose the following direct quotes are received for spot and one-month Swiss francs in New York: .1160-68 and 6-4. Then the outright 30-day forward quote for the Swiss francs is....

A. .1156-62

B. .1164-74

C. .1166-72

D. .1154-64

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92883375

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