Finance

If people expect that their future purchasing power will decline, what

If people expect that their future purchasing power will decline, what will happen to the exchange rate today? What will be an ideal response?     ANSWER Answer: Typically, when people think that the purchasing power of a money is going to decline in the future, due to higher expected inflation, they try to sell […]

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Date: September 19th, 2020

Understanding the theory of purchasing power parity is important becau

Understanding the theory of purchasing power parity is important because deviations from PPP significantly affect the A) operations of the central bank. B) hedging activities of multinational firms. C) profitability of multinational firms. D) arbitrage opportunities in the banking markets.     ANSWER Answer: C

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Date: September 19th, 2020

Float is important in the cash conversion cycle of a firm because ____

Float is important in the cash conversion cycle of a firm because ________. A) its presence reduces a firm’s average collection period B) its presence reduces a firm’s average payment period C) its presence lengthens both a firm’s average collection period and its average payment period D) its presence reduces the investment that a firm […]

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Date: September 19th, 2020

The Solar Inc has daily cash receipts of $90,000. A recent analysis of

The Solar Inc has daily cash receipts of $90,000. A recent analysis of its collections indicated that customers’ payments were in the mail for an average of 4 days. Once received,the payments are processed in one and a half days. After payments are deposited, it takes an average of two and a half days for […]

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Date: September 19th, 2020