Suppose a French car costs 22,000 Euro, and a similar Turkish car costs 300,000 TL. If Euro/TL exhange rate is 16.5, find real exchange rate approximately. Select one: а. 1.21 b. 0.66 c. 0.85 d. 0.99 e. 0.55
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- Accel Co. produces a standard tennis racket in the Netherlands and sells it online to consumers in the United States. This racket competes with a tennis racket produced by Malibu Co. in the United States, which is of similar quality and is priced at about $140. Accel has set the price of its tennis racket at 100 euros. Assuming that the euro's exchange rate (during the sales month in question) was $1.60, then the price of Accel's racket to U.S. consumers is $_________ (enter a whole number). Because U.S. consumers could buy a Malibu racket for only $140, Accel only sold about 1,000 rackets to U.S. consumers in that month. Since then, however, the euro's value has weakened; this month, the euro's exchange rate is only $1.20. U.S. consumers can now purchase the Accel tennis racket for $_________(enter a whole number), which is less than that charged for the U.S. Malibu racket. In this month, Accel sold 5,000 rackets. The U.S. demand for this tennis racket is price-elastic (sensitive to…A UK-manufactured car sells for GBP 14.000. A french-manufactured car sells for EUR 15.750. If the EUR/GBP exchange rate is 1.17, how much does the french-made car cost in GBP? a. 13.467 b. 14.500 c. 16.380 d. 18.427A UK-manufactured car sells for GBP 14.000. A french-manufactured car sells for EUR 15.750. If the EUR/GBP exchange rate changes from 1.17 to 1.09, what is the percentage change in the price of the french car in GBP? a. -6.8% b. -7.3% c. 6.8% d. 7.3%
- Assume that when digging to plant flowers at the backyard of college in northern Ireland a very rich vein of gold is discovered . If the government (a)monetises (b) sterilises this windfall how will the pound sterling to Euro exchange rate be affectedSuppose that the current EUR/GBP exchange rate is £0.86 per euro. The current 6-month interest rates are: GBP 4%, EUR 6%. There are three 6-month forward contracts available, with the following exchange rates: Contract A B C EUR/GBP 0.86 0.85 0.90 You expect to receive an inheritance of €50,000 in six months, and you expect the EUR/GBP exchange rate to remain at £0.86 per euro until then. Would you enter in any of the available contracts today? If so and assuming your expectation about the future exchange rate is correct, how much profit/loss would you make?The euro-pound cross exchange rate can be computed as: A. S(E/E) = S($/E) × S(€/S) %3D B. S($/£) S(E/S) S(€/£) = S(€/£) = S($/€) S(£/S) D. all of the above
- Suppose that the current EUR/GBP exchange rate is £0.86 per euro. The current 6-month interest rates are: GBP 4%, EUR 6%. There are three 6-month forward contracts available, with the following exchange rates: Contract A B C EUR/GBP 0.86 0.85 0.90 You expect to receive an inheritance of €50,000 in six months, and you expect the EUR/GBP exchange rate to remain at £0.86 per euro until then. Would you enter in any of the available contracts today? If so and assuming your expectation about the future exchange rate is correct, how much profit/loss would you make Given the current EUR/GBP exchange rate and the available forward contracts, can you identify any arbitrage opportunities? If yes, provide two examples. In each case, calculate arbitrage profit and explain how this profit can be earned.Let’s suppose you (USA dealer) imported one Earth Equipment machine from German dealer on March 1, 2017 at € 300,000 each, payable in 30 days. The exchange rate on March 1, 2017 was 1.16 US$/€. Then you sold the machine in the US market at US$350,000 in cash on March 29, 2017. On April 1, 2017, you paid to Italian car dealer at the exchange rate of 1.19 US$/€. What was profit or loss from this business in terms of US$? (Please assume all costs are included in price.) Group of answer choices -7000 -9200 -4500 -10200Your firm is based in Mexico and you have USD denominated debt. The firm has an interest payment of USD 475,000 is due and the bank is quoting an exchange rate of USD/MXN 18.0912 - 18.1291. The firm needs to buy USD to make the interest payment. How much will it cost in MXN? A. MXN 2,625,586 B. MXN 12,229,290 C. MXN 8,611,323 D. MXN 8,593,320
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