If British pounds sell for $1.30 (U.S.) per pound, what should dollars sellfor in pounds per dollar?

Q: Golden Rule. Under the gold​ standard, the price of an ounce of gold in U.S. dollars was $ 20.62​,…

A: Under the gold standard, exchange rate between 2 countries is defined in terms of gold. We can…

Q: E) If the Malaysian price level rises by 6% relative to the price level in the United States, what…

A: solution purchasing power parity                 The term purchasing power parity means that if the…

Q: The current exchange rate between the Japanese yen and the U.S. dollar is ¥90 per dollar. If the…

A: The exchange rate is the rate at which one currency can be bought for another. Depreciation of a…

Q: Assume that the indirect quote is for 10.0 Mexican pesos per U.S.dollar. What is the direct quote…

A: Given indirect quote is 10 Mexican pesos per US dollar. Formula for direct quote: Direct quote = 1/…

Q: If the Brazilian real is equal to $0.46, a Canadian dollar is equal to how many Brazilian reals?

A: 1 Brazilian real is equal to $0.46, therefore exchange rate is 1 Brazilian real = $0.46

Q: If one British pound can purchase $1.85 U.S. dollars, how many British pounds can one U.S. dollar…

A: Excel spread sheet for calculation of British pounds:

Q: Let’s suppose that one US Dollar (USD) is currently selling for ten Mexican Pesos (MXN) on the…

A: Arbitrage is a financial technique that is used by traders in the financial markets to gain from the…

Q: er annum in the U.S. and 5.7% per annum in the U.K. Assume that you can borrow £1,000,000 or its…

A: In monetary terms, the exchange rate (also known as the foreign exchange rate, forex rate, or rate)…

Q: Suppose you exported something from Mexico to the US and were quoted a price (payable immediately)…

A: Export: A product or service that is manufactured in one nation but sold to a buyer in another…

Q: d exactly, then the yen would trade at one yen to the dollar. True or False? Explain.

A: Purchasing power parity say that prices all over the world should be one and same and law of one…

Q: Pound 0.64/$ in London, 1.04/Euro in New York, and Pound 0.64/Euro in Frankfurt. Depending on this…

A: Given,   Pound / $ = 0.64 / $ $ / Euro = 1.04 / Euro Pound / Euro = 0.64 / Euro   Now, By dividing…

Q: Suppose £1=€1.28 in Paris, €1 =TL 9.30 in İstanbul, and £1 = TL 13  in London. ignoring transaction…

A: Arbitrage is the process of gaining from the differences of currency values in different market…

Q: 1. What is the price of 1 US dollar in terms of each of the following currencies, given the…

A: Exchange rate is that rate at which currencies of two countries can be exchanged with each other.

Q: If the price of a pair of shoes in the U.S. is $80, the price of the pair of and the exchange same…

A: Answer 3. The correct exchange rate should be 2US/Euro, making the value correct. However, with…

Q: Assume poland's currency (the zloty) is worth $0.17 and the Newzealand dollar (NZ$) is worth $0.005.…

A: Cross rate is the rate at which one currency is exchanged with another currency. Cross rate defines…

Q: The PPP based GDP of Japan is 4.5 trillion dollars and the market exchange based GDP is $5 trillion.…

A: The PPP based GDP of Japan and the market exchange based GDP are known. The PPP based exchange rate…

Q: suppose that an ounce of gold is equal to $25 in US the exchange rate between USD and GBP is…

A: Variables in the question:An ounce of gold is equal to $25 in USUSD/GBP=0.8

Q: Problem: 1. The exchange rates is 8 rubles per dollar. The Russian price level is 200. The price…

A: A rate through which individuals or companies convert their domestic currency with the other…

Q: A television costs $710 in the United States. The same television costs 628.5 euros. If purchasing…

A: The exchange rate at which currencies of two countries are exchanged immediately by the individual…

Q: 25) The current exchange rate between the Japanese yen and the U.S. dollar is ¥100 per dollar. If…

A: Depreciation of a currency implies that the currency has become cheaper. Thus, a lesser amount of…

Q: Assume US dollars and Canadian dollars are at 1SUS = C$1.08. You have C$1,000,000 at your disposal.…

A: The equivalent Mexican Pesos for one million Canadian dollars is $ 483,000,000.

Q: If the Canadian dollar appreciate by 5% relative to the British pound, what will be the percentage…

A: The exchange rate is the value of a country's currency in relation to the currency of another…

Q: Suppose the average price of a Big Mac in the United States is $3.50 while in Japan the average…

A: As per purchasing power parity, the price of the goods is same at the respective exchange rates.…

Q: If British pounds sell for $1.43 (U.S.) per pound, what should dollars sell for in pounds per…

A: Given, 1 British Pound =$1.43

Q: What is $246.20 Canadian Dollars in U.S. Dollars? ($1 Canadian Dollar = $0.76 U.S. Dollar)

A: The Canadian Dollar = $246.20 The conversion rate of the $1 Canadian dollar into the U.S. Dollar is…

Q: Given the interest rates of the U.S. and Japan are similar but the Japanese yen is expected to…

A: When one currency appreciates against the other, it reflects that the given currency is stronger…

Q: A laptop computer costs £1,100 in Europe. The same computer cost GHC 1,540 in Ghana. If we assume…

A: Law of one price says that prices and exchange rate should be in equilibrium.

Q: If one U.S. dollar buys 1.58 Canadian dollars, how many U.S. dollars can you purchase for one…

A: A rate through which individuals or companies convert their domestic currency with the other…

Q: Suppose that California Co., a U.S. based MNC, seeks to capitalize a difference in interest rates…

A: Initial Investment:California Co. initially invests $200,000.Euro Loan:California Co. converts the…

Q: If the United States imports more goods from abroad than it exports, thenforeigners will tend to…

A:

Q: Suppose that California Co., a U.S. based MNC, seeks to capitalize a difference in interest rates…

A: Final Answer: If California Co. borrowed these euros at the prevailing rate of 0.50% percent, they…

Q: Given S(USD/AUD) = 0.7899, the price of a consumption basket in the US is$100 and the price of the…

A: The foreign exchange rate or for-ex is the rate of exchanging currency between different countries…

Q: A country in Southeast Asia states it's gross domestic product in terms of yen. Last year it's GDP…

A: A relative price of one currency stated in terms of another currency is called an exchange rate (or…

Q: Suppose a U.S. firm purchases some Chinese handicrafts. The china costs 1,000 Chinese yuan. At the…

A: Handicrafts cost = 1,000 Chinese yuan  $1.00 = 6.2 yuan

Q: Bank of America is willing to buy or sell Canadian dollar for $.99. The bank is willing to buy or…

A: When there are miss match in exchange rates, there is opportunity for triangular arbitrage profit.

Q: If one U.S. dollar buys 0.6 euro, hoe many dollars can you purchase for one euro?

A: Solution:- Exchange rate means when one currency is denominated in another currency’s rate.

Q: When is the best time to buy euros with us dollar

A: The fact is that there is no single time is the best to buy the euros with US dollars as the foreign…

Q: You buy USD 10 million against Canadian dollars at 1.3785 and sell USD 10 million at 1.3779. What is…

A: Information Provided: Bought USD 10 Million at = 1.3785 Sold USD 10 Million at = 1.3779

Q: Suppose the interest rate in Japan is 2% p. a. and the interest rate in the US is 3.6% p. a. What is…

A: Interest rate in Japan = 2% = 0.02Interest rate in the US = 3.6% = 0.036

Q: A laptop computer costs €1,100 in Europe. The same computer costs GHS 1,540 in Ghana. If we assume…

A: According to purchasing power parity theory, the price of goods or services of one country are…

Q: If the Canadian dollar to U.S. dollar exchange rate is 1.30 and the British pound to U.S. dollar…

A: 1 US dollar = 1.30 Canadian dollar 1 US dollar = 0.77 British pound We need to find Canadian dollar…

Q: If the price of silver in England is £6.81 per ounce, what is the expected price of silver in the…

A: Price in England = 6.81 Spot exchange rate = 0.5173 Price of silver in United States = ?

Q: Suppose the inflation rate in Canada is 1 percent and the inflation rate in Mexico is 3 percent. If…

A: Meaning of Purchasing Power Parity    Purchasing power parity (PPP) is an economic theory of…

Q: Suppose that California Co., a U.S. based MNC, seeks to capitalize a difference in interest rates…

A: The answer is:1. 200,000 pounds2. 480000 pounds  Explanation:California Co. would have a total of…

Instruments of Foreign Exchange Market

Foreign exchange is a worldwide market in which one nation’s currency is converted into another nation’s currency. In further terms, exchanging of nations currency with foreign currencies. Foreign exchange happens at a specified rate which is termed the foreign exchange rate. The exchange rates are not constant continuously changing as they are derived by market forces of supply and demand. Widely used foreign currencies are the United States- dollar, Euro, Japanese Yen, British pound, and Australian dollar. US- dollar is the most denominated foreign currency. The Euro to US dollar is a widely used currency pair in the forex market as these two currencies represent the world’s enormous economy. Forex trade is simple as exchanging currencies at the bank. The main players of forex markets are the central banks, financial institutions, intermediaries, investments banks, and other banks. Central Bank is the supreme player who decides the currency value of their own nation on the forex market. Mostly foreign exchange-traded at FX market (forex market) when tourists’ visits a foreign country, import, and export happens between two countries.