Suppose the price of wheat sold at a terminal elevator in Manitoba on 15 April 2021 was C$5.15 per bushel, and that the price of the March 2022 wheat futures contract was US$4.58 per bushel, and that the Canada-US exchange rate was US$0.71/C$1.00. Use this information to answer the following two questions: Given the above information, what was the unadjusted basis (to the second decimal, with rounding) on April 15, 2021? -$0.57 $0.57 -$0.92 None of the given answers $0.92 Given the above information, what was the adjusted basis (to the second decimal, with rounding) on April 15, 2021? -$1.30 -$1.90 None of the given answers $1.90 O $1,30
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- The table lists foreign exchange rates for August 30, 2018. On that day, how many dollars would be required to purchase 1,000 units of each of the following: British pounds, Canadian dollars, EMU euros, Japanese yen, Mexican pesos, and Swedish kronas? Use the direct quotation for your calculations. Round your answers to the nearest cent. Sample Exchange Rates: Thursday, August 30, 2018 Direct Quotation:U.S. Dollars Required toBuy One Unit ofForeign Currency(1) Indirect Quotation:Number of Units ofForeign Currency perU.S. Dollar(2) Australian dollar 0.7264 1.3767 Brazilian real 0.2409 4.1504 British pound 1.3009 0.7687 Canadian dollar 0.7702 1.2984 Chinese yuan 0.1461 6.8448 Danish krone 0.1565 6.3889 EMU euro 1.1670 0.8569 Hungarian forint 0.00357015 280.10 Israeli shekel 0.2767 3.6136 Japanese yen 0.00901 110.99 Mexican peso 0.0523 19.1133 South African rand 0.0679 14.7205 Swedish krona 0.1096 9.1200 Swiss franc 1.0317 0.9693 Venezuelan bolivar…On 1st June 2021, Nutella Ltd, an Australian company with a functional currency of A$, entered business purchasing inventory from their suppliers in Samoa Tala $ when the exchange rate was A$1.00 = Samoan Tala $2.10. On 30thJune 2021 the exchange rate is A$1.00 = Samoan Tala $2.30. The transaction was settled on 10th July 2021 when the exchange rate was A$1.00 = Samoan Tala $2.20 Required Translate the following for initial and Subsequent measurements and calculate the realised gain or loss on translation. 1. Inventories and accounts payable of Samoa Tala $ 100 000On December 20, 2020, Momeier Company (a U.S.-based company) sold parts to a foreign customer at a price of 45,000 rials. Payment is received on January 10, 2021. Currency exchange rates are as follows: Date U.S. Dollar per Rial December 20, 2020 $ 1.14 December 31, 2020 1.11 January 10, 2021 1.07 How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier’s 2020 income statement? How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier’s 2021 income statement?
- On December 20, 2020, Momeier Company (a U.S.-based company) sold parts to a foreign customer at a price of 175,000 rials. Payment is received on January 10, 2021. Currency exchange rates are as follows: Date U.S. Dollar per Rial December 20, 2020 $ 1.27 December 31, 2020 1.24 January 10, 2021 1.20 How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier’s 2020 income statement?Your company sells specialized electronic components to South Africa payable in South African Rands (ZAR). The following information is available on the $/ZAR exchange rates expected to prevail at the end of the year. The local prices of the electronic components are affected by the value of ZAR as shown below. Qi (Prob) Si Local Price (P’i) Pi (price in dollars) 0.20 $0.0550 ZAR 30,000.00 $1,650.00 0.30 $0.0600 ZAR 27,500.00 $1,650.000.30 $0.0650 ZAR 25,000.00 $1,625.00 0.20 $0.0700 ZAR 22,500.00 $1,575.00 a. What is relationship, as measured by β, between $/ZAR rates and the component prices in US dollars. b. Explain how you can hedge the above exposure using currency futures. The one-year forward rate…Suppose the spot exchange rate for the U.S. dollar is CAD$1.01 and the six-month forward rate is CAD$1.03. a. Which is worth more, a U.S. dollar or a Canadian dollar? multiple choice 1 U.S. dollar Canadian dollar b. Assuming absolute PPP holds, what is the cost in the United States of an Elkhead beer if the price in Canada is CAD$3.10? (Round the answer to 2 decimal places. Omit $ sign in your response.) Cost in U.S dollar $ c. Is the U.S. dollar selling at a premium or a discount relative to the Canadian dollar? multiple choice 2 Discount Premium d. Which currency is expected to appreciate in value? multiple choice 3 Canada dollar U.S. dollar e. Which country do you think has higher interest rates—the United States or Canada? multiple choice 4 U.S. Canada please do all parts
- If the exchange rate for Canadian and U.S. dollars is 0.92777 to 1, this implies that 13 Canadian dollars will buy ____ worth of U.S. dollars. (Select the nearest answer.)Suppose a 1-year UK T-bill pays 2.14% and a 1-year Canadian T-bill pays 1.32%. The current spot exchange rate is 1 British pound (GBP) = 1.7244 Canadian dollar (CAD) and the 1-year forward exchange rate is 1 GBP = 1.6837 CAD. What arbitrage profit can an investor earn on an investment value of CAD 1 milion?Cocoa Beverage Plc exports goods to New York valued at $30,000. Receipt of payment is immediate on delivery of the goods, what is the value of pound sterling received, given that the exchange rate quote is $/£ 1.3500 – 1.4500. Where 1.3500 is the bid price and 1.4500 is the ask price.
- At the end of 2020, an Italian subsidiary of a U.S. parent reports €1,000,000 in equipment purchased when the exchange rate was $1.40, and €3,000,000 in equipment purchased when the exchange rate was $1.50. The average exchange rate for 2020 is $1.35, and the beginning and ending rates for 2020 are $1.42 and $1.31, respectively. If the Italian subsidiary’s functional currency is the U.S. dollar, the equipment account, in U.S. dollars, is a. $5,240,000 b. $5,350,000 c. $5,400,000 d. $5,900,000On October 1, 2020, Mertag Company (a U.S.-based company) receives an order from a customer in Poland to deliver goods on January 31, 2021, for a price of 1,036,000 Polish zlotys (PLN). Mertag enters into a forward contract on October 1, 2020, to sell PLN 1,036,000 in four months (on January 31, 2021). U.S. dollar -Polish zloty exchange rates are as follows:Date Spot Rate Forward Rate October 1, 2020 .25 .29 December 31, 2020 .28 .32 January 31, 2021 .30 N/A Mertag designates the forward contract as a fair value hedge of a foreign firm commitment. The fair value of the firm commitment is measured by referring to changes in the forward rate, and, therfore, forward points are included in assessing hedge effectiveness. Mertag must close its books and prepare financial statements on December 31. Discounting to present value can be ignored. A. Prepare journal entries for the foreign…On October 1, 2020, Mertag Company (a U.S.-based company) receives an order from a customer in Poland to deliver goods on January 31, 2021, for a price of 1,000,000 Polish zlotys (PLN). Mertag enters into a forward contract on October 1, 2020, to sell PLN 1,000,000 in four months (on January 31, 2021). U.S. dollar–Polish zloty exchange rates are as follows: Date Spot Rate Forward Rate(to January 31, 2021) October 1, 2020 $ 0.25 $ 0.29 December 31, 2020 0.28 0.31 January 31, 2021 0.30 N/A Mertag designates the forward contract as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is measured by referring to changes in the forward rate, and, therefore, forward points are included in assessing hedge effectiveness. Mertag must close its books and prepare financial statements on December 31. Discounting to present value can be ignored. Prepare journal entries for the foreign currency forward contract,…