Country |
Contract |
$/Foreign Currency |
Canada – Dollar |
Spot |
0.8437 |
|
30-day |
0.8417 |
|
90-day |
0.8395 |
Japan – Yen |
Spot |
0.004684 |
|
30-day |
0.004717 |
|
90-day |
0.004781 |
Switzerland – Franc |
Spot |
0.5139 |
|
30-day |
0.5169 |
|
90-day |
0.5315 |
a. (Spot exchange rates) An American business needs to pay (a) 10,000 Canadian dollars, (b) 2 million yen, and (c) 50,000 Swiss francs to businesses abroad. What are the dollar payments to the respective countries?
b. (Spot exchange rates) An American business pays $10,000, $15,000, and $20,000 to suppliers in, respectively, Japan, Switzerland, and Canada. How much, in local currencies, do the suppliers receive?
c. (Exchange rate arbitrage) You own $10,000. The dollar rate in Tokyo is 216.6743. The yen rate in New York is given in the preceding table. Are arbitrage profits possible? Set up an arbitrage scheme with your capital. What is the gain (loss) in dollars?
Country |
Contract |
$/Foreign Currency |
Canada – Dollar |
Spot |
0.8437 |
|
30-day |
0.8417 |
|
90-day |
0.8395 |
Japan – Yen |
Spot |
0.004684 |
|
30-day |
0.004717 |
|
90-day |
0.004781 |
Switzerland – Franc |
Spot |
0.5139 |
|
30-day |
0.5169 |
|
90-day |
0.5315 |
(Exchange rate arbitrage) You own $10,000. The dollar rate in Tokyo is 216.6743.
The yen rate in New York is given in the preceding table. Are arbitrage profits possible?
Set up an arbitrage scheme with your capital. What is the gain (loss) in dollars?
d. (Cross rates) Compute the Canadian dollar/yen and the yen/Swiss franc spot rates from the data in the preceding table
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more
Recent Comments