Jennifer purchased US$14,000 from a bank in America, which charged her a commission of 0.8%, and sold the US dollars to a bank in Canada, which charged her a 0.25% commission. How much money did she lose or gain? Assume that the exchange rate was C$1 = US$0.8924. C$ 0.00 Round to the nearest cent Answer as positive is there was a gain, and negative if there was a loss

Jennifer purchased US$14,000 from a bank in America, which charged her a commission of 0.8%, and sold the US dollars to a bank in Canada, which charged her a 0.25% commission. How much money did she lose or gain? Assume that the exchange rate was C$1 = US$0.8924. C$ 0.00 Round to the nearest cent Answer as positive is there was a gain, and negative if there was a loss

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter36: Exchange Rates And Financial Links Between Countries

Section: Chapter Questions

Problem 13E

See similar textbooks

Similar questions

Suppose that 1 Swedish krona could be purchased in the foreign exchange market today for $0.36. If the krona appreciated 11% tomorrow against the dollar, how many kronas would a dollar buy tomorrow? L
A U.S. MNC has subsidiaries in Britain and Japan. Assume the revenue in both subsidiaries in local currency remains the same. British WOS WOS Revenue £100M ¥10 Bn exchange $1.7/£ rate to $1.6/£ Japanese ¥ 85.12/$ to ¥ 77.12/$ What will be the impact on the $ amounts from each WOS? O Increase from British WOS; Increase from Japanese WOS O decrease from British WOS; decrease from Japanese WOS O Increase from British WOS; decrease from Japanese WOS O decrease from British WOS; Increase from Japanese WOS
Given that: Spet rate 3 month forward £1/$1.6365 1.6385 0.005 -0.0047 Compute the cost of cover to a foreign exchange customer who: Buys dollars one month forward Sells dollars one month forward
Suppose DeGraw Corporation, a U.S. exporter, sold a solar heating station to a Japanese customer at a price of 143.5 million yen, when the exchange rate was 140 yen per dollar. In order to close the sale, DeGraw agreed to be paid in yen, thus agreeing to take some exchange rate risk for the transaction. The terms were net 6 months. a. If the yen fell against the dollar such that one dollar would buy 154.4 yen when the invoice was paid, what dollar amount would DeGraw receive after it exchanged yen for U.S. dollars? b. What is the difference (in dollars) between what DeGraw could have received had they asked for payment immediately (before the devaluation of the yen) instead of six months later?
Suppose that a U.S. company wishes to purchase goods from a German producer. The U.S. firm agrees to take the delivery of the goods in three months and to pay €1 million Euros at that time. This company wishes to avoid this exchange rate risk by buying Euros at the 3-month forward rate, f = 0.95 (€/$). Then, how much this company would have to pay in US dollars in exchange for €1 million Euros? a. $1 million dollars. b. $1,052,632 dollars. c. $950,000 dollars.
Let’s suppose you (USA dealer) imported a product from German on Dec 1, 2018 at € 300, payable in 60 days. You sold the product in the US market at $400 in cash on Dec 15, 2018. The company's fiscal year ends on Dec 31. You paid to your German supplier on Feb 1, 2019. Below, please find the exchange rate information: Dec 1, 2018: 0.8 €/$.. Dec 31, 2018: 1.5 €/$. Feb 1, 2019: 0.6 €/$. What was net income for 2018 and 2019, respectively? Group of answer choices -$200, -$100 -$100, $200 $300, -$200 $200, -$300
Compute the profit from triangular profit if the bid and ask rate for pound and US$ are 0.70pound/US$, 0.73pound/US$, and for US$ and euro are 0.9euro/US$ and 0.94euro/US$, and for pound and euro are 0.64pound/euro, and 0.68pound/euro. Compute the triangular arbitrage profit if the notional sum is $1,000. The steps to be followed are buy euros, then buy pound and then buy US$. a. -$ 32.35 b. -$ 73.53 c. $ 72.19 d. $ 9.12
Jetta production cost in 2002 and 2003 was 8,500 Euro per Jetta. Jettas were sold in US at $12,000 in 2002 and 2003. Forward hedge exchange rate was 1 $/Euro in 2003. The market exchange rate was 1.83 $/Euro (i.e. rate without hedge) in 2003. If 1,500 Jetta were sold in US, in 2003, by 40% forward hedge and 60% not hedged. What would be profits or loss from sales of 1,500 Jetta in US? € 351,639 €1, 281,946 € 1,291,661 € 362,259
Janice is a U.S. citizen traveling to Mexico with $5,000. She should be exchange her dollars for ____ pesos at an exchange rate of U.S. dollars to Mexican pesos of 0.06. (Note: Round to the nearest one in foreign currency.) a) 52,457 Ob) 91,760 O c) 83,333 d) 74,242 Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
The demand for Australian dollars in the foreign exchange market equals 12000 - 2000E and the supply of Australian dollars in the foreign exchange market equals 3000 + 3000E, where E is the nominal exchange rate expressed in yen per Australian dollar. If the Australian dollar is fixed at 3 yen per Australian dollar, then to maintain this fixed rate, what is the required change in the Reserve Bank of Australia's holdings of yen? O decrease by 18000 yen decrease by 2000 yen O increase by 2000 yen O increase by 18000 yen
When domestic currency deposits and foreign currency deposits are imperfect substitutes, the right-hand side of the interest parity condition equation_ 1) is added a term (p) that measures the risk premium on the domestic currency deposits. O2) is added a term (p) that measures the risk premium on the foreign currency deposits. 3) is subtracted a term (p) that measures the risk premium on the foreign currency deposits. 4) is multiplied by a term (p) that measures the risk premium on the foreign currency deposits.
13- You are a U.S. importer who buys goods from many different countries. How many U.S. dollars do you need to settle each of the following invoices? 1,000,000 Australian dollars for wool blankets (exchange rate: A$1 = $0.769) 500,000 British pounds for dishes (exchange rate: £1 = $1.5855) 100,000 Indian rupees for baskets (exchange rate: Rs1 = $0.0602) 350 million Japanese yen for stereo components (exchange rate: ¥1 = $0.0069) 825,000 euro for German wine (exchange rate: €1 = $1.05) 14- What is the dollar value of the invoices in exercise 13 if the dollar: Depreciates 10 percent against the Australian dollar Appreciates 10 percent against the British pound Depreciates 10 percent against the Indian rupee Appreciates 20 percent against the Japanese yen Depreciates 100 percent against the euro