CH18 - exchanged back for 1.69 = 1.4493 USD Return in GB = 30,019,876.11 30,000,000 1.0047 USD Return in US = 30,424,991.21 9 Normal Cost in

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1. a. $100 * 3.3807 = 338.07 zlotys b. 1 Euro = $1.3266 c. 5,000,000 million euro * 1.3266 = $6,633,000 d. New Zeeland @ $.5743 < Singapore @ $.6610 e. Chilean Peso @ $.001719 < Mexican Peso @ .0742 f. The cross rate = (1.3266)(1.1426) = 1.5158 g. Most = Kuwait Dinar @ 1 = $3.4399 Least = Vietnamese Dong @ 1 = $.000005634 3. a. Forward Rate = 100.01 per dollar. Selling at a premium because it is worth more in a 6 month forward than its current swap rate b. Forward Rate = $.8084 per cad. Selling at a discount because it is worth less in a 3 month forward than its current swamp rate c. Yen and CAD will appreciate to the USD because less yen and CAD will be needed to buy dollars in the future. On the flip side the dollar with depreciate to both currencies. 7. Invest in US because the return will be 405,115.11 higher 30,000,000 * .68 = 20,400,000 * 1.0051^3 = 20,712,120 since it was forward swapped it can be
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Unformatted text preview: exchanged back for 1/.69 = 1.4493 USD Return in GB = 30,019,876.11 30,000,000 * 1.0047 USD Return in US = 30,424,991.21 9. Normal Cost in Singapore = 230.75/1.5129 = 152.521 Individual Profit Margin = 160-152.521 = 7.48 Profit = 7.48 * 30,000 units = 224,350.58 10% increase in exchange rates Cost in Singapore = 230.75/(1.1*1.5129) = 138.66 Individual Profit Margin = 160-138.66 = 21.34 Profit = 21.34 * 30,000 units = 640,318.71 10% decrease in exchange rates Cost in Singapore = 230.75/(.9*1.5129) = 169.55 Individual Profit Margin = 160-169.55 = -9.55 Profit = -9.55 * 30,000 units = -284,054.91 loss BE exchange rate 230.75X=160 X = 160/230.75 = .6934 USD per 1 Singapore dollar or 1.4422 per USD This represents a -4.67% change (1.4422 - 1.5129)/1.5129 = -0.0467...
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This note was uploaded on 01/23/2012 for the course MGT 111 taught by Professor Unknown during the Spring '11 term at Washington State University .

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CH18 - exchanged back for 1.69 = 1.4493 USD Return in GB = 30,019,876.11 30,000,000 1.0047 USD Return in US = 30,424,991.21 9 Normal Cost in

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