A German sports car is selling for €65,000. What is thedollar price in the United States for the German car ifthe exchange rate is 0.80 euro per dollar?
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A German sports car is selling for €65,000. What is the
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the exchange rate is 0.80 euro per dollar?
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- If an American traveling abroad can obtain 115 euros for $100 U.S, the current euro per $ exchange rate is: a. 0.870 euros/$ b. 1.15 euros/$ c. 115euros/$ d. 1euro/1.15$In France, one kilogram of macadamia nuts costs 10.5Euro and 10 Dollars in Canadian in Canada. According to the law of one price, the expected exchange rate between the Euro and the Canadian would be_____ 1.5Euro/$ 0.12Dollar/Euro 1.67 Dollar/Euro 0.67 Euro/Dollar1. You have an accounts payable to a German exporter for 100 Porsche Cayenne SUVs. The seller offers a 2 percent discount for payment within 10 days and full payment due in 30 days (2/10 net 30). Today the exchange rate is $1.40 per Euro. You notice that the 30 day forward rate for the $/Euro is $1.38…..what should you do? You owe 70,000 Euros for each of the cars (before any discounts). [show your work!] 2. You are changing planes in London for a flight to Paris where you will connect with your flight to Capetown. You are picking up reading material for the flight and are looking at the prices listed on the Economist magazine which conveniently lists prices in several different global currencies. You note that the price in Pounds is 2.40 pounds and the price in Euros is 2 Euros. The exchange rate for the dollar (your credit card was issued in the USA) is $1.59/pound and $1.3837/euro. Should you buy reading materials now or wait until you’re in Paris? 3. You notice that the…
- If expected inflation drops in Europe, so that interestrates fall there, what will happen to the exchange rateon the U.S. dollar?Please help!! If the current exchange rate is US$0.719/C$ and you want to buy 500 U.S. dollars, then this would cost you Answer Canadian dollars (enter your answer to two decimal places).If the Japanese price level rises by 5% relative to theprice level in the United States, what does the theoryof purchasing power parity predict will happen to thevalue of the Japanese yen in terms of dollars?
- Suppose you trade dollars and euros for a bank that has branches in Los Angeles and Paris. You can electronically transfer the funds between the two branch locations at no cost, and trading commissions are negligible. The current dollar-per-euro exchange rate in Los Angeles is ESEUR LA 1.6027, РА while in Paris, it is Es/EUR 1.569. You can make a profit for the bank if you buy euros in and sell them in Assuming other foreign exchange traders face the same exchange rates you do, they will buy dollars in and sell them in PA РА . As a result, the dollar-per-euro exchange rate in Paris (Es/EURA) will and the dollar-per-euro exchange rate in Los Angeles (ES/EURA) willYou own a local company. In the past year, you successfully expanded your sales market into Europe, and you now have profits and cash denominated in euros. You want to convert the euros to your home country currency to repatriate the profits and pay taxes. You are a. not required to convert the euros to the home currency to pay taxes. b. a demander of the euro in the foreign exchange market. c. a supplier of your home country's currency in the foreign exchange market. d. a demander of your home country's currency in the foreign exchange market.If the Canadian dollar to U.S. dollar exchange rate is1.24 and the British pound to U.S. dollar exchange rateis 0.68, what must be the Canadian dollar to Britishpound exchange rate?
- Use the following table, which shows the supply and demand schedules for the euro, to answer the next question. Quantity of Euros Price Supplied 400 360 300 286 267 Multiple Choice $1.10 1.00 0.90 0.80 0.70 O If the U.S. government decides to fix or peg the price of the euro at $1.00, it would have to buy 360 euros. sell 160 euros. buy 100 euros. Quantity of Euros Demanded 100 sell 360 euros. 200 300 400 500The UK inflation rate is predicted to be 10% and the Eurozone inflation rate is predicted to be 6%. The current euro per pound exchange rate is €1.20/£1. What is the forecast €/£ rate in one year’s time according to Purchasing Power Parity? Is the euro expected to appreciate or depreciate and by approximately what percentage? (Show your working in full) (ii) The euro per pound spot rate is €1.20/£1. The UK interest rate is 4% and the Eurozone interest rate is 6%. Calculate the six-month forward rate using the covered interest parity formula. State if the pound is at a forward discount or at a forward premium. (Show your working in full)The current exchange rate is $1.19 / Euro. The expected inflation rate for the next year in the U.S. is 0.62% while it is 0.79% in the EU. What would be the expected exchange rate in one year’s time if Purchasing Power Parity holds? Provide your answer till 4 digits after the decimal point. Based on yourresult, is the Euro expected to appreciate or depreciate?
