Answers_to_Assignment_2_

Answers_to_Assignment_2_ - Answers to Assignment# 2 Chapter...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Answers to Assignment# 2 Chapter 3 11. Cross Exchange Rate. Assume Poland’s currency (the zloty) is worth $.17 and the Japanese yen is worth $.008. What is the cross rate of the zloty with respect to yen? That is, how many yen equal a zloty? ANSWER: $.17/$.008 = 21.25 1 zloty = 21.25 yen 18. Foreign Exchange. You just came back from Canada, where the Canadian dollar was worth $.70. You still have C$200 from your trip and could exchange them for dollars at the airport, but the airport foreign exchange desk will only buy them for $.60. Next week, you will be going to Mexico and will need pesos. The airport foreign exchange desk will sell you pesos for $.10 per peso. You met a tourist at the airport who is from Mexico and is on his way to Canada. He is willing to buy your C$200 for 1,300 pesos. Should you accept the offer or cash the Canadian dollars in at the airport? Explain. ANSWER: Exchange with the tourist. If you exchange the C$ for pesos at the foreign exchange desk, the cross-rate is $.60/$10 = 6. Thus, the C$200 would be exchanged for 1,200 pesos (computed as 200 × 6). If you exchange Canadian dollars for pesos with the tourist, you will receive 1,300 pesos. 24. Interpreting Exchange Rate Quotations. Today you notice the following exchange rate quotations: *$1 is equal to 3.00 Argentine pesos *1 Argentine peso = 0.50 Canadian dollars You need to purchase 100,000 Canadian dollars with U.S. dollars. How many U.S. dollars will you need for your purchase? ANSWER: Value of AP = $.333 Value of C$ in AP = 2 Value of C$ in $ = $.666 So you need $66,666 to purchase C$100,000. Chapter 4
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 12/08/2011 for the course FSNA 415 taught by Professor Chengruhu during the Fall '11 term at SUNY Canton.

Page1 / 3

Answers_to_Assignment_2_ - Answers to Assignment# 2 Chapter...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online