Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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What impact do Exchange Rate changes have on the Balance of Trade? Calculate the following
scenario and convert the purchase price of a truck into dollars for both exchange rates to see the
impact.
Truck imported from Germany to the US
Period 1
Period 2
Sales price in Euros (Does not change over periods)
600,000 Euro
600,000 Euro
Dollar to Euro Exchange Rate
Euro to Dollar Exchange Rate
S1-20 Euro
SI - 15 Euro
1 Euro = ?S
1 Euro ?S
With this information, you should be able to calculate the sales price of the truck in dollars for
Period 1 and 2. How much of a decrease/increase has the exchange rate fluctuation saved/cost us
in dollars between Period 1 and 2?
O Cost $3.000 Dollars
O Saved $10,000 Dollars
Cost $10,000 Dollars
O Cannot determine with this info due to Exchange Rate not being provided for the inverse of Euro to Dollar
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Transcribed Image Text:What impact do Exchange Rate changes have on the Balance of Trade? Calculate the following scenario and convert the purchase price of a truck into dollars for both exchange rates to see the impact. Truck imported from Germany to the US Period 1 Period 2 Sales price in Euros (Does not change over periods) 600,000 Euro 600,000 Euro Dollar to Euro Exchange Rate Euro to Dollar Exchange Rate S1-20 Euro SI - 15 Euro 1 Euro = ?S 1 Euro ?S With this information, you should be able to calculate the sales price of the truck in dollars for Period 1 and 2. How much of a decrease/increase has the exchange rate fluctuation saved/cost us in dollars between Period 1 and 2? O Cost $3.000 Dollars O Saved $10,000 Dollars Cost $10,000 Dollars O Cannot determine with this info due to Exchange Rate not being provided for the inverse of Euro to Dollar
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