[ s3.us-east-1.amazonaws.com 4/27 to 5/3: Investment Companies (Chapter 19) - FIN384-... https://s3.us-east-1.amazonaws.com/blackboard.learn.xyth... 4/27 to 5/3: Investment...

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[ s3.us-east-1.amazonaws.com 4/27 to 5/3: Investment Companies (Chapter 19) - FIN384-... https://s3.us-east-1.amazonaws.com/blackboard.learn.xyth... 4/27 to 5/3: Investment Companies (Chapter 19) - FIN38... coursehero 1. The table below shows the price of steel in three countries. The exchange rate between the dollar and the pound is $1.65/ and the exchange rate between the yen and the dollar is 84/$. Which country offers the best price for a steel purchase? Supplier American Price in Local Currency British Japanese $190 116 15,500 2. You are the purchasing agent for a U.S. firm buying steel based on the quotes shown in question 1. Your assistant tells you that the pound is now stronger against the dollar with a new exchange rate of $1.70/. Is the exchange rate change good news or bad news? Explain. 3. While in a clothing store in London, you find a cashmere sweater that is on sale at 50 percent off with a new price of 250. In the U.S. the same sweater costs $300. The current exchange rate is $1.58/. Is the sweater a bargain in London? Explain. 4. An American executive is going on a business trip to Japan and England. Before she departs, she purchases $10,000 worth of Japanese yen at the prevailing rate of 82.54/$. After finishing her business in Japan, she departs for London where she converts the remaining yen to British pounds. She sells 512,375 at a rate of 132.03/. She finally returns to the United States with 567.35, which she would like to convert to U.S. dollars. Based only on the rates given, how many dollars will she receive if she sells the pounds? 5. Stardust, Inc. is an exporter of plumbing fixtures. About 30 percent of its sales are made in Canada. The sales department just found out that the Canadian dollar is at a premium against the U.S. dollar based on the 90-day forward rate, while the 180-day forward rate indicates that the Canadian dollar is at a forward discount. What is the likely impact of these rates on the company's sales to Canada? [ s3.us-east-1.amazonaws.com 4/27 to 5/3: Investment Companies (Chapter 19) - FIN384-... https://s3.us-east-1.amazonaws.com/blackboard.learn.xyth... 4/27 to 5/3: Investment Companies (Chapter 19) - FIN38... coursehero 1. The table below shows the price of steel in three countries. The exchange rate between the dollar and the pound is $1.65/ and the exchange rate between the yen and the dollar is 84/$. Which country offers the best price for a steel purchase? Supplier American Price in Local Currency British Japanese $190 116 15,500 2. You are the purchasing agent for a U.S. firm buying steel based on the quotes shown in question 1. Your assistant tells you that the pound is now stronger against the dollar with a new exchange rate of $1.70/. Is the exchange rate change good news or bad news? Explain. 3. While in a clothing store in London, you find a cashmere sweater that is on sale at 50 percent off with a new price of 250. In the U.S. the same sweater costs $300. The current exchange rate is $1.58/. Is the sweater a bargain in London? Explain. 4. An American executive is going on a business trip to Japan and England. Before she departs, she purchases $10,000 worth of Japanese yen at the prevailing rate of 82.54/$. After finishing her business in Japan, she departs for London where she converts the remaining yen to British pounds. She sells 512,375 at a rate of 132.03/. She finally returns to the United States with 567.35, which she would like to convert to U.S. dollars. Based only on the rates given, how many dollars will she receive if she sells the pounds? 5. Stardust, Inc. is an exporter of plumbing fixtures. About 30 percent of its sales are made in Canada. The sales department just found out that the Canadian dollar is at a premium against the U.S. dollar based on the 90-day forward rate, while the 180-day forward rate indicates that the Canadian dollar is at a forward discount. What is the likely impact of these rates on the company's sales to Canada?