Messages
Proposals
Get Urgent Writing Help In Your Essays, Assignments, Homeworks, Dissertation, Thesis Or Coursework & Achieve A+ Grades.
Privacy Guaranteed - 100% Plagiarism Free Writing - Free Turnitin Report - Professional And Experienced Writers - 24/7 Online Support
Name:_______________________ DATE:
-----------------------------------------------------------------------------------------------------------
Write or type your answers to the question in the space provided below; if you need more room, you can write on the back of this page. Or attach your answers to this page.
Due date: Tuesday, August 2.
FOREIGN EXCHANGE MARKET: RISK, APPRECIATION,/DEPRECIATION
FORWARD CONTRACTS, RISK MANAGEMENT (7 questions in total).
1) One of the functions of the foreign exchange market is to convert currencies. Convert the currencies as indicated below (note how the rate is presented in order to determine how to calculate the amount you would receive): (1 point)
CONVERT
RATE
AMOUNT
100,000 US$
1 US$ = 108.14 yen (¥)
yen (¥)
45,000 US$
1 US$ = 13.5033 Mex. Peso
Mex. Peso
1200 US$
1 Euro(€) = 1.2624 US$
Euro (€)
250 Brit.Pound (£)
1 BritPound(£) = 1.5360 US$
US$
150,000 Indian rupee INR
1 US$ = 60.9610 INR
US$
2500 Australian $
1 US $ = 1.3542 Aus.$
US$
2) Explain what appreciation of a currency means. Explain what depreciation of a currency means. (1 point)
3) What is Foreign Exchange risk? (1 point)
4) Analyze the following exchange rates and identify if the subject currencies indicated are appreciating or depreciating in value based on the “new” rates quoted. (2 points)
OLD RATE NEW RATE SUBJECT APP/DEP?
1 US$ = 90.20 Swiss Franc
1 US$ = 95.38 Swiss Franc
Swiss Franc
1 ThBaht = US$ .0282
1 ThBaht = US$ .0296
Thai baht
108¥ Jap. yen = 1 US$
98¥ Jap. yen = 1 US$
Japanese yen
1 Russ. ruble= US$ .0281
1 Russ. Ruble = US$ .0238
US dollar
1 US$ = 6.8365 Swed.krona
1US$ = 7.2773 Swed. krona
Swedish krona
1Euro(€) = US$ 1.3719
1Euro(€) = US$ 1.38957
Euro
1US$ = 1,014.95 So.Kor.won
1US$ = 1,053.11So.Kor.won
US dollar
1 US$ = 1.0188 Can. $
1 US$ = .9645 Can. $
Canadian dollar
1 US$ = 7.5610 Arg. Peso
1 US$ = 7.86029Arg. Peso
Argentine peso
13.0260 MXP = 1 US$
13.0560 MXP = 1 US$
Mexican peso
Page one of two
5) What are forward exchange contracts? What is their purpose? What does it mean when a currency is selling at “discount on forward”? What does it mean when a currency is selling at “premium on forward”? (2 points)
6) Analyze the spot and forward rates quoted below. Identify if the expectation is, based on the forward rates, that the subject currencies indicated are going to appreciate or depreciate in value and if they are selling at a discount or premium on the forward rate. (The subject currency is what you hold and must convert) (1.5 points)
COUNTRY
SPOT RATE
FORWARD RATE
SUBJECT
APP/DEP
DISC/PREM on FWD?
GERMANY
1.2667 US$/ Euro
1.1116 US $/Euro
EURO
GREAT BRITAIN
1.6608 US $/£
1.3930 US $/£
BRITISH POUND
CANADA
.87350 US $/ CAD
.8898 US$/CAD
CANADIAN DOLLAR
JAPAN
.00874 US $/ ¥
.00946 US $/ ¥
YEN
7) Read the Closing Case: “Billabong” on pages 318-19 of the textbook (10th ) and answer the following questions about foreign exchange risk management. (2 points)
a) Why does a fall in the value of the Australian dollar against the U.S. dollar benefit Billabong?
b) Could the rise in the value of the Australian dollar that occurred in 2009 have been predicted?
c) What might Billabong had done in order to better protect itself against the unanticipated rise in the value of the Australian dollar that occurred in 2009?
d) The Australian dollar continued to rise by another 20 percent against the U.S. dollar in between 2010 and 2012. How would this have affected Billabong? Is there anything that Billabong might have done to limit its long-term economic exposure to changes in the value of the currency in its largest export market?
Page two of two
Applied Sciences
Architecture and Design
Biology
Business & Finance
Chemistry
Computer Science
Geography
Geology
Education
Engineering
English
Environmental science
Spanish
Government
History
Human Resource Management
Information Systems
Law
Literature
Mathematics
Nursing
Physics
Political Science
Psychology
Reading
Science
Social Science
Home
Blog
Archive
Contact
google+twitterfacebook
Copyright © 2019 HomeworkMarket.com
| Writer | Writer Name | Amount | Client Comments & Rating |
|---|---|---|---|
ONLINE |
Instant Homework Helper |
$36 |
She helped me in last minute in a very reasonable price. She is a lifesaver, I got A+ grade in my homework, I will surely hire her again for my next assignments, Thumbs Up! |
Custom Original Solution And Get A+ Grades
Custom Original Solution And Get A+ Grades
Custom Original Solution And Get A+ Grades
| Writer | Writer Name | Offer | Chat |
|---|---|---|---|
ONLINE |
Helping HandI am an Academic writer with 10 years of experience. As an Academic writer, my aim is to generate unique content without Plagiarism as per the client’s requirements. |
$140 | Chat With Writer |
ONLINE |
Top Essay TutorI have more than 12 years of experience in managing online classes, exams, and quizzes on different websites like; Connect, McGraw-Hill, and Blackboard. I always provide a guarantee to my clients for their grades. |
$145 | Chat With Writer |
ONLINE |
Peter O.Hello, I can assist you in writing attractive and compelling content on ganja and its movement globally. I will provide with valuable, informative content that you will appreciate. The content will surely hit your target audience. I will provide you with the work that will be according to the needs of the targeted audience and Google’s requirement. |
$135 | Chat With Writer |
ONLINE |
University Coursework HelpHi dear, I am ready to do your homework in a reasonable price. |
$142 | Chat With Writer |
Let our expert academic writers to help you in achieving a+ grades in your homework, assignment, quiz or exam.