Your Canadian company processes raw sugar for sale in the United States, and the firm has just received a container of raw material from the UK. You have an invoice that asks you to pay £20,000 in 30 days. The current exchange rate is $1.75/£. b. If you thought the dollar would trade at $2.0/£ in 30 days, what should you do?

Q: Imagine that you are importing pasta from Italy and reselling it in the United States. Your largest…

A: Forward rate agreement helps the buyer of a currency to buy the required currency at a future rate…

Q: JJ Fashion Wholesalers Ltd, an Indian clothing manufacturer, has a contract to purchase cotton from…

A: a. Since the amount is payable in foreign currency,  we require foreign currency from bank.…

Q: A business executive needs to pay for a major product from Japan in two months (60 days). The ForEx…

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Q: XYZ Corporation, located in the United States, has an accounts payable obligation of ¥1500 million…

A: Money Market Hedge - It refers to the method under which a company's domestic currency is locked in…

Q: 1985, a given Japanese imported automobile sold for 1,476,000 yen, or $8,200. If the car still sold…

A: Exchange rate is the relationship between the values of 2 currencies.

Q: A U.S. company can borrow 10,000 pounds in Great Britain for 6% interest, paying back 10,600 pounds…

A: Here, Borrowing Amount is 10,000 pounds Amount paid back in year is 10,600 pounds Interest Rate of…

Q: In Munich, a hotdog costs €9 and in Boston a hot dog costs $1. If the exchange rate is $1.35/Euro.…

A: Cost per Munich hotdog = €9 Cost per US hotdog = $1 Exchange rate €1 = $1.35

Q: Carpet Baggers, Inc., is proposing to construct a new bagging plant in a country in Europe. The two…

A: Spot exchange rate for euros is $1.45/€ Spot exchange rate for Swiss francs is SFr1.65/$ Interest…

Q: KS Inc. produces a product in the United Kingdom at a cost of £0.55 per unit which it then sells in…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: (a) Jade Smith is a foreign exchange trader for a bank in New York. He has $1 million for a…

A: Spot exchange rate: It is the current market rate to exchange one currency with another.

Q: IBM purchased computer chips from NEC, a Japanese electronics concern, and was billed 1500 million…

A: a) Computation:

Q: Assume you are in India and borrowed 800,000 Rs from one of your friends who lives in Australia.…

A: The question is related to forex management. The details are given below.

Q: Let’s suppose that one US Dollar (USD) is currently selling for ten Mexican Pesos (MXN) on the…

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Q: Suppose you exported something from Mexico to the US and were quoted a price (payable immediately)…

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Q: Suppose your company imports computer motherboards from Singapore. The exchange rate is given in…

A: The question is based on the concept of Financial Management. As per the Bartleby guidelines we are…

Q: If a bottle of French wine priced at 200 francs can be purchased for $100, the exchange rate is?

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Q: n investor has

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Q: Suppose a U.S. firm must pay 200 million Swiss francs to a Swiss firm in 90 days.Briefly explain how…

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Q: Assume you are in India and borrowed 800,000 Rs from one of your friends who lives in Australia.…

A: Foreign Exchange Rates: The amount of money that is required to buy one unit of foreign currency…

Q: Suppose your company imports computer motherboards from Singapore. The exchange rate is currently…

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Q: he current market exchange rate is 2.2 francs per pound. Suppose you need to buy 6 pounds using…

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Q: In the foreign exchange spot market, one Indian Rupee can buy 2.80 Malaysian Ringgit. The Malaysian…

A: Solution:- Foreign exchange rate means the price of one currency in terms of another currency.

Q: Suppose your company imports computer motherboards from Singapore. The exchange rate is $1.4353 per…

A: Exchange rate denotes the price of one country's currency with respect to the price of another…

Q: Suppose your company imports computer motherboards from Singapore. The exchange rate is $1.4651 per…

A: The exchange rate is the rate at which one currency is exchanged for another currency. It is the…

Q: Carpet Baggers, Inc., is proposing to construct a new bagging plant in a country in Europe. The two…

A: Forward rate in units of currency 1 per one unit of currency 2 With spot rate (S in units of…

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A: Base currency means the currency at the denominator position.

Q: Bank of America is willing to buy or sell Canadian dollar for $.99. The bank is willing to buy or…

A: When there are miss match in exchange rates, there is opportunity for triangular arbitrage profit.

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A:

Q: A year ago, a Swiss investor bought a 1-year U.S. Treasury security at a price of $9,708.74, with a…

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Q: bigail lives in the UK and earns 40,000 pounds sterling per year. Her friend Barry lives in Japan…

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Q: Mr. Sultan has bought a JBL Boombox, for HKD 2,000, PlayStation for HKD 4,000, and three Briefcases…

A: a. Cost in Australia for the Products based on exchange rates. The cost in Australia would $6,200.

Q: Your Canadian company processes raw sugar for sale in the United States, and the firm has just…

A:

Q: foreign exchange trader in Canada, has CAD. 4,000,000 for short-term money market investment and…

A: There are arbitrage opportunities available in market due to differences in spot rate and forward…

Q: Your Canadian company processes raw sugar for sale in the United States, and the firm has just…

A: Given: Current exchange rate = $1.75/£. Invoice value =£20,000

Q: Suppose you want to buy a German car, which costs €55,000. What will be price of this car in the…

A: Cost of Car = €55,000 Exchange Rate = €0.90 per U.S. dollar

Q: Suppose you are a U.S. investor who is planning to invest $785,000 in Mexico. Your Mexican…

A: Beginning value of investment in $ = $ 785,000 Value of investment in Mexico Pesos = $785,000*12.20…

Instruments of Foreign Exchange Market

Foreign exchange is a worldwide market in which one nation’s currency is converted into another nation’s currency. In further terms, exchanging of nations currency with foreign currencies. Foreign exchange happens at a specified rate which is termed the foreign exchange rate. The exchange rates are not constant continuously changing as they are derived by market forces of supply and demand. Widely used foreign currencies are the United States- dollar, Euro, Japanese Yen, British pound, and Australian dollar. US- dollar is the most denominated foreign currency. The Euro to US dollar is a widely used currency pair in the forex market as these two currencies represent the world’s enormous economy. Forex trade is simple as exchanging currencies at the bank. The main players of forex markets are the central banks, financial institutions, intermediaries, investments banks, and other banks. Central Bank is the supreme player who decides the currency value of their own nation on the forex market. Mostly foreign exchange-traded at FX market (forex market) when tourists’ visits a foreign country, import, and export happens between two countries.