BUS4070_CREIGHTON_WEEK-9-ASSIGNMENT-2

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DePaul University *

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4070

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Finance

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Feb 20, 2024

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BUS4070: WEEK 9 ASSIGNMENT 2: Text Problems Bill Creighton Capella University September 8, 2023 1
Problem 19-8 CROSS RATES Suppose the exchange rate between the U.S. dollar and the Swedish krona was 7.97 krona = $1, and the exchange rate between the dollar and the British pound was £1 = $1.29. What would be the exchange rate between Swedish kronas and pounds? Kr/pound=Kr/dollar*dollar/pound=1/7.97*1.29=0.16 £1 = Kr0.16 Problem 19-13 SPOT AND FORWARD RATES Arvin Australian Imports has agreed to purchase 15,000 cases of Australian wine for 4 million Australian dollars at today’s spot rate. The firm’s financial manager, Sarah Vintnor, has noted the following current spot and forward rates: U.S. Dollar/Australian Dollar Australian Dollar/U.S. Dollar Spot 0.7930 1.2610 30-day forward 0.7927 1.2615 90-day forward 0.7921 1.2625 180-day forward 0.7911 1.2640 On the same day, Vintnor agrees to purchase 15,000 more cases of wine in 3 months at the same price of 4 million Australian dollars. 2
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