Bhupatbhai Problem 9-3 (LG 9-4)On March 13, 2020, you convert 540,000 U.S. dollars to Japanese yen in the spot foreignexchange market and purchase a six-month forward contract to convert yen into dollars.How much will you receive in U.S. dollars at the end of six months? Use the data in Table9-1 for this problem. (Round your answer to 2 decimal places. (e.g., 32.16))Amount that you will receive in U.S. dollars at the end of six months

Spot exchange rate: The current exchange rate allowing you to exchange one currency for…

Answered: Problem 9-3 (LG 9-4) On March 13, 2020,…

Fundamentals of Financial Management (MindTap Course List)

15th Edition

ISBN:9781337395250

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter19: Multinational Financial Management

Section: Chapter Questions

Problem 5P

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14. On April 1, A.C. Corporation a calendar-year U.S. electronics manufacturer,buys 715000 Yen worth of computer chips from the Hidachi company paying 10 percent down, the balance to be paid in 3 months. Interest at 8 percent per annum is payable on the unpaid foreign currency balance. The U.S. dollars /Japanese Yen exchange rate on April 1 was $1.00= 108; on July 1 it was $1.00=103.5.What would be the the cash payment by the end of this transaction?
19. On April 1, A.C. Corporation a calendar-year U.S. electronics manufacturer, buys 825000 Yen worth of computer chips from the Hidachi company paying 10 percent down, the balance to be paid in 3 months. Interest at 8 percent per annum is payable on the unpaid foreign currency balance. The U.S. dollars /Japanese Yen exchange rate on April 1 was $1.00= 103.5; on July 1 it was $1.00=103.5.What would be the translation gain or loss for this transaction?
KF1. Exquisite Jewelers has purchased 100 pounds of silver from Silver Mines Ltd. at US$8,000 per pound payable in one year. The current spot exchange rate is 1.6295 (C$/US$) and the one year forward rate, quoted by the company’s bank, is 1.6312. The Financial Controller at Fine Jewelers suggests that the spot rate in one year will be 1.6224. Interest rates in Canada are currently 3.9 percent for one year and 3.7 percent in the United States. Required: a) Outline, with calculations, three alternative actions available to Golden Jewelers to handle its foreign exchange exposure. b) Advise the company which alternative they should take, providing the reason for your recommendation
On 2nd March 2022 Star Exporters have received export order for USD 2 million for shipment to Germany between 15th March to 30th March 2022. The letter of credit to that extent was received by the exporters and the documents were required to be submitted within 15 days from the date of shipment. The payment terms are 90 days sight. Rates on 2nd March 2022 (Spot Date 6th March 2022) are as follows: Spot USD 44.3500 / 44.3800 Forward July 45/46 When bank is quoting as above it means, the bank would buy at ___ Rate and Sell at ___ Rate a. Spot, Ask b. Bid, Spot c. Spot, Forward d. Bid, Ask
On January 1, one U.S. dollar can be exchanged for eight foreign currencies (FC). The dollar can be invested short term at a rate of 4%, and the FC can be invested at a rate of 5%.1. Calculate the direct and indirect spot exchange rates as of January 1.2. Calculate the 180-day forward rate to buy FC (assume 365 days per year).3. If the spot rate is 1 FC = $0.740 and the 90-day forward rate is $0.752, what does this suggest about interest rates in the two countries?4. Explain why a weak dollar relative to the FC would likely increase U.S. exports.5. Discuss what would happen to the forward rate if the dollar strengthened relative to the FC.
25-A UK trader imported goods from US for $ 50,000 and the spot rate GBP 0.500 = 1 USD. The UK importer expected that GBP may appreciate by 4% after 30 days. What will be the new exchange rate after thirty days for 1 GBP? (consider the first 4 decimals to select the correct answer) a. None of the options b. USD 2.0833/GBP c. GBP 0.4900/USD d. USD 0.5000/GBP
10. A company has entered into a cash-settled forward contract to sell 10m pounds at $1.5/pound. If the exchange rate at expiration is $1.75/pound, the company will: A. Make a payment of 2.5m dollars B. Receive a payment of 2.5 million pounds C. Make a payment of 10m pounds
A Canadian supplier is offering two options to his American client to pay for an equipment: paying 13,000 Canadian dollars now or paying 10,000 US dollars in 6 months. If the annual interest rate for the Canadian dollar is 5% and for the US dollar is 8%, what is the "implied" exchange rate? Question 5 options: CAD0.7581/USD. CAD1.3520/USD. CAD0.7505/USD. CAD1.3190/USD. CAD1.3325/USD. CAD0.7396/USD.
Q17. October 20, 2020, Corporation D entered a contract to receive two million Argentine pesos on January 20, 2021, for $100,000 based on a $1 per exchange rate futures contract (three months). 20 Argentine pesos. (Why would D Corporation get this contract? A) Corporation D believes that the value of the Argentine peso will increase at the same rate as the dollar B) Corporation D believes that Argentine's economy will grow at a lower rate than that of the United States. C) You could be protecting yourself from a future need to make a payment in Mexican pesos D) Corporation D believes that the value of the Argentine peso will decrease relative to the dollar.
4) Brief, Inc., had a receivable from a foreign customer that is payable in the customer’s local currency. On December 31, 2020, Brief correctly included this receivable for 200,000 local currency units (LCU) in its balance sheet at $110,000. When Brief collected the receivable on February 15, 2021, the U.S. dollar equivalent was $120,000. In Brief’s 2021 consolidated income statement, how much should it report as a foreign exchange gain? a) $–0– b)$10,000 c) $15,000 d) $25,000

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