# 33 Exchange Rate Risk Suppose your company, which is based in Nantes, imports computer motherboards from Singapore.

## Question:

33 Exchange Rate Risk Suppose your company, which is based in Nantes, imports computer motherboards from Singapore. The exchange rate is given in Figure 30.1. You have just placed an order for 30,000 motherboards at a cost to you of 158.5 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for €100 each. Calculate your profit if the exchange rate goes up or down by 10 per cent over the next 90 days. What is the break-even exchange rate? What percentage rise or fall does this represent in terms of the Singapore dollar versus the euro?

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