Cash Card Currency (E1=) Sell price Buy price Sell price Buy price Euro 1.13 1.21 1.17 1.28 US Dollar 1.05 1.14 1.09 1.19 Swiss Franc 1.19 1.32 1.21 1.39 Canadian Dollar 1.58 1.62 1.64 1.71 Chilean Peso 743.21 749.53 759.31 768.56 Travel Money conversions - Great Britain Pound Cosh Cand

Cash Card Currency (E1=) Sell price Buy price Sell price Buy price Euro 1.13 1.21 1.17 1.28 US Dollar 1.05 1.14 1.09 1.19 Swiss Franc 1.19 1.32 1.21 1.39 Canadian Dollar 1.58 1.62 1.64 1.71 Chilean Peso 743.21 749.53 759.31 768.56 Travel Money conversions - Great Britain Pound Cosh Cand

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter7: International Arbitrage And Interest Rate Parity

Section: Chapter Questions

Problem 33QA

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Concept explainers

Exchange Rate Risk

It is the possibility that the value of a currency will fluctuate in the future. In the wake of globalization, business establishments have increasingly ventured into international markets. The volume of international trade has prospered excellently in the near past and is expected to be more affluent in the future. The use of exchange-traded derivative financial instruments has been multi-folded to provide for the requirements of various MNCs and offshore potential investors. Most banks and financial institutions have helped integrate the global economies. Our Government has introduced some bold and extreme measures to fulfil the purpose behind the fiscal, industrial, and monetary policies. The enactment of GST is a huge step towards streamlining the taxation system of the country. Owing to Covid-19, this aspect of corporate risk management has become critical.

Question

Cash
Card
Currency (£1=)
Sell price
Buy price
Sell price
Buy price
Euro
1.13
1.21
1.17
1.28
US Dollar
1.05
1.14
1.09
1.19
Swiss Franc
1.19
132
1.21
1.39
Canadian Dollar
1.58
1.62
1.64
1.71
Chilean Peso
743.21
749.53
759.31
768.56
Travel Money conversions - Great Britain Pound
Cash
Cand
What is the cost of using a card, compared to cash, when exchanging £20,000 into US Dollars?
£175
£560
£800
£920

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