Say That the Current Direct Exchange Rate Is $1

question 8

Multiple Choice

Say that the current direct exchange rate is $1.5537/£.The cash inflow in pounds is £70,000 in two years and the discount rate is 7%.During this time,the anticipated annual inflation rate is 3% per year in the United States and 5% per year in the United Kingdom.What is the present value (in U.S.dollars) of the £100,000 after conversion from pounds to dollars if you are using current and forward exchange rates?

• A)$70,000
• B)$104,655.26
• C)$91,409.96
• D)$88,307.62

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Definitions:

Valid Drivers License

A legally recognized document certifying that an individual is authorized to operate a motor vehicle in the issuing authority's jurisdiction.

Validity Generalization

A statistical approach that suggests the validity of a test in one context can extend to other contexts, simplifying the validation process of selection instruments.

Criterion-Related Validation

The process of validating how well a test or assessment predicts outcomes based on established criteria.

Past Behavior

Previous actions or conduct of an individual, often analyzed to predict future behavior.