Suppose a U.S. firm purchases some Chinese handicrafts. The china costs 1,000 Chinese yuan. At the exchange rate of $1.00 = 6.2 yuan, the dollar price of the goods is:

Q: The exchange rate is 113 Swiss francs per dollar. How many U.S. dollars are needed to purchase 2,500…

A: In the given case, we have provided the exchange rate of per dollar into swiss francs.And, we have…

Q: In the spot market, 7.8 pesos can be exchanged for 1 U.S. dollar. A pairof headphones costs $15 in…

A: Given that;7.8 pesos can be exchanged for 1 U.S. dollar (USD).A pair of headphones costs $15 in the…

Q: XYZ Corporation imports goods from China with a total invoice value of $10,000,000. The exchange…

A: Foreign exchange rates represent the relative value of one currency in terms of the another. These…

Q: A U.S. firm buys merchandise from a Portuguese company at a cost of EUR 250,000.  The merchandise…

A: The United State firm is exposed to foreign exchange fluctuation because it will pay in dollars in…

Q: Required: State what are the presumed advantages of using forward exchange contracts.  Calculate…

A: Data given::> Invoice amount = $130,000 Payment details: On shipment = $40,000 One month after…

Q: Suppose that Retrojo Inc. is a U.S. based MNC that will need to purchase F$1.10 million (Fijian…

A: USD needed at depreciated rate= $462,000.00Explanation:Retrojo Inc. would need $462,000.00 (US…

Q: In Sweden, the exchange rate of the Norwegian krone is 0.95. The exchange rate of the Polish…

A: Arbitrage opportunity is the risk free opportunity available for short period due to mispricing in…

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: our firm is a U.S.-based supplier of agricultural parts. A European customer just made a €50,000…

A: Calculate the value of accounts receivable on the date of the sale, using the exchange rate at the…

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: Suppose that the current exchange rate is €0.70 = $1.00. The direct quote, from the U.S. perspective…

A: Exchange rate is €0.70 = $1.00The current exchange rate refers to the current value of one currency…

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: A telephone costs $50 in the United States.  Today, in the currency markets you observe the…

A: Based on the information given in the above question we need to convert the price of telephone in…

Q: Using the cost and revenue information shown for Dekalb, Inc., determine how the costs, revenue, and…

A: cash flowThe cash received and paid for the operative and day-to-day activities of the company is…

Q: If the current USDJPY exchange rate is 135.00 Japanese yen per U.S. dollar, the price of a Big Mac…

A: The law of one price is a concept which will advocate for uniform price across different nation for…

Q: XYZ Corporation exchanges Japanese yen (JPY) into US dollars. They exchange 50,000,000 JPY into USD.…

A: JPY to be exchanged = 50,000,000 JPYCurrent exchange rate : 1 JPY = 0.0082 USDCurrency exchange fee…

Q: Sing Tao wants to import goods for 2.12 million Australian dollar (A$) and pay to Australian…

A: Money market hedging is a financial strategy used by individuals, businesses, and investors to…

Q: Blur Ltd, a UK importer, expects to make a payment of 1.8m Australian dollars (A$) for sure in one…

A: Hedging is a strategy to reduce the risk of price movement by creating an off-setting position in…

Q: Suppose that a US-based company is buying Chinese goods. Current exchange rate for Chinese Yuan is…

A: Given that the company is purchasing 800 units. Price of one unit = 13000¥ Current exchange rate =…

Q: Suppose your company imports computer motherboards from Singapore. The exchange rate is $1.4878 per…

A: Exchange rate denotes the price of one country's currency with respect to the price of another…

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 New Zealand company needs to make a payment of 600,000 Thai Baht (THB). To do this it needs to…

A: Bid price refers to the price at which the forex trader buys the foreign currency while Ask price…

Q: You are a U.S. importer and just placed an order of antiques worth £100,000 from a U.K supplier. You…

A: One of the techniques for hedging foreign exchange risk is the money market hedge. It helps to lock…

Q: Suppose your company imports computer motherboards from Singapore. The exchange rate is $1.4353 per…

A: Exchange rate denotes the price of one country's currency with respect to the price of another…

Q: Travelex Australia provides the following three exchange rates. You assume that there is a…

A: Here, Bid RateAsk RateValue of Chinese Yuan (CNY) in Australian Dollar (AUD)0.20460.2243Value of…

Q: In the spot market, 7.3 pesos can be exchanged for 1 U.S. dollar. A pair of headphones costs $10 in…

A: Purchasing power parity: It is a method of comparing the purchasing power of the currencies by…

Q: What is your profit from exploiting the opportunity once (in $)?

A: Exchange rateBidAskValue of yen in U.S. dollars$0.008$0.0081Value of Canadian dollar in U.S.…

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: You are a U.S. importer and just placed an order of antiques worth £100,000 from a U.K supplier. You…

A: A foreign exchange payment is hedged through an option contract. Total cost of purchase needs to be…

Q: Cocoa Beverage Plc exports goods to New York valued at $30,000. Receipt of payment is immediate on…

A: Bid rate is the buying rate for bank for purchasing a commodity whereas Ask rate is selling rate for…

Q: Using the data provided in Table 1, determine the cost in Chinese yuan (CNY) when employing the…

A: To determine the cost in Chinese yuan (CNY) when employing forward market hedging strategy, we can…

Q: Suppose an American Investor is given the current exchange rates in the following table. The listed…

A: Direct exchange rates refer to 1 unit of the foreign or host currency quoted in terms of the…

Q: months' time. The U.S. interest rate is 2% p.a., and the Swiss interest rate Assume that the current…

A: Rate of exchange rate between two countries depends on interest rate and move according to interest…

Q: NTERNATIONAL FINANCE Today you learned about following exchange rate quotes: (a) 1 KWD (Kuwaiti…

A: In the international business, there is a need for some other currencies but they can not be bought…

Q: Toyota sells Camrys in the U.S. for $23,000 when the exchange rate is 80 JPY/USD. If the exchange…

A: In this question, we are required to determine the price Toyota has to charge to receive the same…

Q: Suppose your company imports computer motherboards from Singapore. The exchange rate is currently…

A: Given: Particulars Amount   Mother boards           30,000   Exchange rate 1.3356 S$/US$…

Q: A US based investor plans to invest $44,400 in Russia, where the interest rate is 6.65%. If the…

A: While investing in other country, first exchange rate shall be applied and then interest rate of…

Q: A television set costs $650 in the United States. The same set costs 2,435 French francs (FF). If…

A: INTRODUCTION: The current market price for converting one currency for another is referred to as the…

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: Your company sells specialized electronic components to South Africa payable in South African Rands…

A: (a) Beta (β) for $/ZAR currently using probabilities = (0.20 * $0.0550 * ZAR 30,000) + (0.30 *…

Q: Assume the exchange rate is 1.05 Swiss francs per U.S. dollar. How many U.S. dollars are needed to…

A: Given, 1 US Dollar = 1.05 Swiss Frans

Q: STEP: 2 of 2 Suppose that Retrojo Inc. is a U.S. based MNC that will need to purchase F$2.00 million…

A: As per the problem, we are required to compute the number of US dollars required to exchange the 2…

Q: Calculate the Chinese yuan (CNY) costs using the forward market hedging strategy

A: A forward contract is a type of financial agreement between two parties to buy or sell an asset at a…

Q: Suppose that Retrojo Inc. is a U.S. based MNC that will need to purchase F$1.10 million (Fijian…

A: 1) $583,000.2)$704,000.3) Using Forward Contract: If Retrojo believes that the Fijian dollar will…

Q: rates and prices today: the spot exchange rate today: AU$2.05 per U.K pound; the price level in…

A: According to purchase power parity the prices in two countries must be in equilibrium with exchange…

Q: Suppose that the U.S. firm Halliburton buys construction equipment from the Japanese firm Komatsu at…

A: Here,ExchangeRate of Yen/$ is ¥100/$Interest Rate of Yen is 6%Interest Rate of Japan is 4%Amount…

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.