Mr. Sultan has bought a JBL Boombox, for HKD 2,000, PlayStation for HKD 4,000, and three Briefcases for HKD 25,000, during a shopping spree in Hong Kong. The spot exchange rate is HKD/AUD 5. (A) What should the Price JBL Boombox, PlayStation, and three Briefcases cost in Australia? (B) Suppose Mr. Sultan is stopped at customs as he arrives in Sydney, and must pay import duties of 20 percent. If the same JBL Boombox, PlayStation, and three Briefcases cost AUD 450, AUD 1,500, and AUD 8,000 in Australia, respectively, was his shopping spree worth at least the HKD 10,000 paid for airfare and hotels during his trip?

Q: BB can borrow in the United States for 9%, while AA has to pay 10% to borrow in the United States.…

A: A swap contract is an arrangement to swap future liabilities between two parties, the given…

Q: JJ Fashion Wholesalers Ltd, an Indian clothing manufacturer, has a contract to purchase cotton from…

A: a. Since the amount is payable in foreign currency,  we require foreign currency from bank.…

Q: 1985, a given Japanese imported automobile sold for 1,476,000 yen, or $8,200. If the car still sold…

A: Exchange rate is the relationship between the values of 2 currencies.

Q: Assume you are in India and borrowed 800,000 Rs from one of your friends who lives in Australia.…

A: Given,  Amount borrower = 800000INR Home currency = Indian INR Foreign Currency = Australian $  Spot…

Q: An Omani businessman has just completed transactions in UAE and Europe. He is now holding 4,000,000…

A: The dealer exchange rates are the best estimates of the proceeds received from the conversion of one…

Q: Assume you are in India and borrowed 800,000 Rs from one of your friends who lives in Australia.…

A: The question is related to forex management. The details are given below.

Q: Cecilia who is a currency trader in Japan observes the following market conditions: • Annual…

A: Theoretical Forward rate = Current Spot Exchange rate x (1+Interest rate in Home…

Q: The following exchange rates are available to you. (You can buy or sell at the stated rates.)…

A: ¥120.00 = 1A$ SF1.6000 = 1A$ ¥80.00 =1SF Amount available = SF10, 000,000

Q: BL lives in the US and has $800,000 surplus funds that he wants to invest for one year in any…

A: a.) Covered interest arbitrage is an arbitration trading strategy whereby an investor capitalises on…

Q: Before boarding her flight to Zurich, Switzerland, Amber purchased CHF1,100 from her bank when the…

A: The ask/bid price in foreign exchange is used to determine the exchange rate that the brokers offer…

Q: In June 2006, a Korean investor is considering investing 100 Wons in bank deposits in Korea (in Won)…

A: Interest Rate Parity forward exchange rate concept is used in the above question. This simply states…

Q: Assume you are in India and borrowed 800,000 Rs from one of your friends who lives in Australia.…

A: Foreign Exchange Rates: The amount of money that is required to buy one unit of foreign currency…

Q: he current market exchange rate is 2.2 francs per pound. Suppose you need to buy 6 pounds using…

A: In international business the exchange rate between the currencies play very important role in…

Q: If the current USDJPY exchange rate is 135.00 Japanese yen per U.S. dollar, the price of a Big Mac…

A: The law of one price is a concept which will advocate for uniform price across different nation for…

Q: Suppose exchange rate of Japanese yen in US $ is $.010, exchange rate of euro in US $ is $1.34, and…

A: When there are miss match in exchange rates, there is opportunity for triangular arbitrage profit.…

Q: Andrew has been an astute investor. He has set aside ksh 10 million to be invested in USA at a rate…

A:

Q: Good day,   How should I resolve this question, please?   Your friend from Australia purchased a…

A: Current exchange rate = C$1 = A$1.0227 Value of computer = C$3,900 In Australian dollars, value of…

Q: You often travel to Japan and Australia and you need to exchange Japanese and Australian currencies.…

A: Currency Bid Ask Japanese Yen (JPY) 105 JPY/USD 110 JPY/USD Australian Dollar (AUD)…

Q: You often travel to Japan and Australia and you need to exchange Japanese and Australian currencies.…

A: The Foreign Exchange rate is the exchange rate at which one country's currency exchanges with…

Q: The Bank of France sells U.S. dollars ($) at a rate of ($1.40)/(€1) and buys U.S. dollars at a rate…

A: Exchanging 36 euros to US dollars means buying US dollars from Bank of France.

Q: Abigail lives in the UK and earns 40,000 pounds sterling per year. Her friend Barry lives in Japan…

A: In the context of the given question, we are required to solve this question. It can be considered a…

Q: If a Japanese car costs 1,500,000 yen, a similar American car costs $30,000, and a dollar can buy…

A: Base currency means the currency at the denominator position.

Q: A currency trader observes that in the spot exchange market, 1 U.S.dollar can be exchanged for 3.58…

A: The requirement is to calculate the cross exchange rate between the two currencies. To calculate the…

Q: A currency trader observes that in the spot exchange market, 1 U.S. dollar can be exchanged for 3.5…

A: You have to find out cross rates between two currencies.

Q: A US based investor plans to invest $44,400 in Russia, where the interest rate is 6.65%. If the…

A: While investing in other country, first exchange rate shall be applied and then interest rate of…

Q: Bank of America is willing to buy or sell Canadian dollar for $.99. The bank is willing to buy or…

A: When there are miss match in exchange rates, there is opportunity for triangular arbitrage profit.

Q: In 1983, the Japanese yen–U.S. dollar exchange rate (USD/JPY) was 245 yen per dollar,and the dollar…

A:

Q: In New York, you can exchange $1 for €0.8355 or £0.6006. Suppose that, in Berlin, £1 costs €1.1722.…

A: Triangle arbitrage is used when the trader can benefit from the difference in the exchange rate of…

Q: As a Korean importer, you pay 80,000 Swiss for your goods. How many Won is that? The bid-ask prices…

A: Direct quote: One unit of foreign currency is expressed in number of units of home currency is…

Q: Assume you are in India and borrowed 800,000 Rs from one of your friends who lives in Australia.…

A:

Q: a) Suppose you are a Bangladesh Citizen who is planning to go to USA. Current Exchange Rate is Tk…

A: Since you have asked multiple questions , we will solve the first question for you. Please ask the…

Q: How many dollars will you receive when you exchange this money if the U.S. dollar equivalent of the…

A: Currency exchange rate is a rate at which one currency is being traded to determine its value in…

Q: As a foreign exchange trader at a Citibank, you are given the following quotations: 1-month 2-month…

A: Data given: Spot rate: 1S$ = RM 3.0500 /10     1 month forward 1S$ = RM 3.20 - 3.70 1S$ = Bid Rate…

Q: You are in Europe, and you owe 40,000 Chinese Yuan? The bid-ask prices are quoted as CHFCNY…

A: Bid price: 1 EU = Cy7.6170 Ask price: 1 EU = Cy7.6172 ------------------------- Indirect: One unit…

Q: bigail lives in the UK and earns 40,000 pounds sterling per year. Her friend Barry lives in Japan…

A: Currency exchange can be defined as the process of valuing one currency over another currency in…

Q: Assume you have $1,000 to invest in a triangular arbitrage transaction, what is your best course of…

A: Note: It is a situation where multiple questions have been asked, so we are allowed to solve the…

Q: Assume you are an exporter and you want to sell USD that you have received as export remittance. The…

A: Answer: The selling rate of 1 USD is INR 1/65.12

Q: In New York, you can exchange $1 for €0.8575 or £0.7. Suppose that, in Berlin, £1 costs €1.1515. How…

A: Triangle arbitrage is a process in which the trader takes advantage of the difference in exchange…

Q: If today 1 US Dollar can buy 3 Korean Won and 1 Korean Won can buy equals 2 Philippine Peso, what is…

A: Exchange rate (ER) is a value at which two or more currencies are exchanged or traded. To make the…

Q: If the price of a Big Mac hamburger in the US is $3.99 and the price of a Big Mac hamburger is $6.60…

A: It is seen that a big mac hamburger costs In US is $3.99 In Australia is $6.60 It is also given that…

Q: investor has $2m to invest and has the option of placing it in a us bank account paying 2% annually,…

A:

Q: If a Big Mac costs 550 yen in Japan and the exchange rate of Japanese yen against US dollar is 100…

A: Purchasing power parity: As per this theory the exchange rate should reflect the purchasing power of…

Q: Assume that a UK family visits Spain every summer. Last year, the hotel room where they stayed was…

A: "Hi, Thanks for the Question. Since you asked multiple sub parts question, we will answer first…

Q: Suppose you want to buy a German car, which costs €55,000. What will be price of this car in the…

A: Cost of Car = €55,000 Exchange Rate = €0.90 per U.S. dollar

Q: AnswerUS dollars after the arbitrage.

A: Given exchange rate quotation:- S$1 = $0.60£1 =  $1.50£1 =  S$2.60 The arbitrageur in order to…

Q: If today 1 US Dollar can buy 3 Korean Won and 1 Korean Won can buy equals 2 Philippine Peso, what is…

A: Cross exchange rate is used when there is no direct quotation available between two currencies.…

Exchange Rate Risk

It is the possibility that the value of a currency will fluctuate in the future. In the wake of globalization, business establishments have increasingly ventured into international markets. The volume of international trade has prospered excellently in the near past and is expected to be more affluent in the future. The use of exchange-traded derivative financial instruments has been multi-folded to provide for the requirements of various MNCs and offshore potential investors. Most banks and financial institutions have helped integrate the global economies. Our Government has introduced some bold and extreme measures to fulfil the purpose behind the fiscal, industrial, and monetary policies. The enactment of GST is a huge step towards streamlining the taxation system of the country. Owing to Covid-19, this aspect of corporate risk management has become critical.