Exchange Rates Research - exchange the currency now. I...

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Exchange Rates Research Exchange Rates Research CheckPoint: Exchange Rates Research Alicia May Axia College of University of Phoenix 1
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Exchange Rates Research The exchange rates for trading U.S. Dollars to Yen is .009035 Yen per U.S. Dollar as a spot rate and .009048 Yen per U.S. Dollar for the one month forward exchange rate. Since the company only requires 100,000 Yen for a payment next month it is in the company's best interest to do the forward exchange. Due to the small value of the transaction, $904.80 for the forward exchange, there is no value in tying up our assets for a net savings of $1.30. If the currency transaction was much larger, or there was a much wider gap between spot and forward exchange rates, it would then be beneficial to
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Unformatted text preview: exchange the currency now. I think I would choose a forward rate for this transaction because the amount of the exchange rate can be set now and on the set date still be for the agreed upon amount. The dollars that would have to be spent to obtain the required amount of yen if I did my calculations correct would be, 100000 JPY (yen) = 1080 USD. For the second question I have found that on the web site provided in the text, Portugals currency has been converted to euros. There was no escudo conversion in the conversion calculator or Portugal for that matter. So after doing the new conversions I have found that it would be wise to invest with Poland as 1,000,000 ztoty = 343,800 USD, and 45,000,000 Euros =59,966,415 USD. 2...
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This note was uploaded on 05/14/2010 for the course INB 205 AAAA0NSI48 taught by Professor Deanmccullough during the Spring '10 term at University of Phoenix.

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Exchange Rates Research - exchange the currency now. I...

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