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# International Finance Exchange rates

1. In class, we studied a long-run exchange rate model WITHOUT assuming PPP (i.e., the model using the real exchange rate). Using your knowledge about the money market and output market conditions (now and in the future), predict the long-run (future) yen/dollar exchange rate. Explain your answer.
2. When we studied the model of exchange rate overshooting, we assumed that the price level (or generally, prices of goods and services) to be (initially fixed). Discuss this model without the assumption of price rigidity. Will over-shooting happen without that assumption? Explain.

## Accural basis accounting

On December 15, 2015, a public company received an order from a customer for services to be performed on December 28, 2015. Due to a backlog of orders, the company does not perform the services until January 3, 2016. The customer pays for the services on January 6, 2016. When should revenue be recorded for the company? Why (support your argument with a principle from the textbook)?

## FIN440 Budgeting and retirement forecast for high net worth client

Finance Assignment Help You have been tasked with creating a capital budget, retirement forecast, and presentation for a high net worth client. The following information is provided:
Married couple- \$250,000 per year income from W-2 form.
Ages 45 and 42, no children.
In addition to the W-2 income they own a business (S-Corporation) and typically see about \$100,000 in dividends each year (total between the two of them).
Current retirement savings = \$1,500,000.
They contribute the maximum possible to a Simple IRA each year.
They would like to retire at 50 with \$2,500,000 in their retirement account.
They will also be continuing ownership in the S-corp and plan to continue to receive the dividends after retirement.
They are looking at the following options from a capital budget perspective (NOTE: they can only choose one):
Purchase a rental property for \$500,000. It will create cash flow of \$60,000 per year in rent, which will increase by 4% per year over the next 10 years. They then anticipate being able to sell the property for \$750,000.
Invest \$500,000 in a 10 year 10% coupon bond, paying out dividends semi-annually.
Submit an Excel workbook with the following worksheets:
Capital Budget calculations for both options.
Retirement forecast based on the above information

## Market Efficiency and Behavioral Finance

Read Chapter 13 in the text. Read What Is Behavioral Finance? | SoFi (Links to an external site.) and ECON 252 (2011) – Lecture 11 – Behavioral Finance and the Role of Psychology | Open Yale Courses (Links to an external site.)
You also might want to reference the book Irrational Exuberance by Robert Shiller.
Read the Closing Case at the end of the chapter and answer the associated questions.
Write a paragraph explaining the following story in your own words. A student was walking down the hall with his finance professor when they both saw a \$20 bill on the ground. As the student bent down to pick it up, the professor shook his head slowly and, with a look of disappointment on his face, said patiently to the student, “Don’t bother. If it were really there, someone else would have already picked it up.”
Find a high-quality article on the doc-com bubble of the late 90’s or the rise of Meme stocks in the last year or two (provide a link to the article you use) and explain how the stock market action of these periods fits into the concept of market efficiency. In other words, is it possible for markets in the U.S. to be highly efficient and still have bubbles like these?

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