A UK trader imported goods from US for $ 50,000 and the spot rate GBP 0.500 = 1 USD. The UK importer expected that GBP may appreciate by 4% after 30 days. What will be the new exchange rate after thirty days for 1 GBP? (consider the first 4 decimals to select the correct answer) a. None of the options b. USD 2.0833/GBP c. GBP 0.4900/USD d. USD 0.5000/GBP

Q: Suppose your firm is planning to pay for goods imported from France. The payment will be made in two…

A: Your firm is in US whose home currency is USD. When you import goods from France, you need to pay in…

Q: 30-GBP against OMR spot exchange rate is GBP 3.500 = 1 OMR and 6 months forward rate is quoted as…

A: An exchange rate is the value of one currency in terms of another country's currency.

Q: acceptable sales price for this project 1,075,000 or $1.35/euro Refer to Instruction 10.1. What is…

A: Plain States is a US firm whose home currency is USD. When they get paid in 6 months, they get…

Q: A Hong Kong based investment company requires USD 4 million in 40 days to close a deal in the US…

A: The spot and forward exchange rates: The rate at which a foreign currency pair trades at the current…

Q: 22-An Omani company imported goods from Europe for EUR 20,000. The spot rate for EUR 2.5/OMR. If the…

A: given that,  2.5 EUR = 1 OMR   company imported goods from Europe for EUR20000.  how much the…

Q: On New Year's Day 2021, the actual exchange rate of USD:CNY was 6.5306. A professor once suggested…

A: Thank you for posting questions. Since you have posted multiple questions, as per the guideline I am…

Q: 7-An Omani trader expects to receive USD 500,000 in one month. The current spot rate for US dollars…

A: An exchange rate is the value of one currency in terms of another country's currency.

Q: Suppose a U.S. investor wishes to invest in a British firm currently selling for £20 per share. The…

A: Current Selling Price = £20 per shareCurrent Exchange Rate =  $2/£Possible prices per share after 1…

Q: 90 Day Forward Rates for Hongkong Dollar Bid Rate Ask Rate USDHKD0.6050.610 A Hongkong exporter…

A: in this you have convert HONGKONG currency to US dollars and that will be amount to be received.

Q: Forward rates. Your company has posted you on a 9-month overseas assignment in Budapest, Hungary.…

A: The conceptual formula used is expressed in a mathematical equation:

Q: 20. As a trader in a bank, you are asked to provide a 2-year FX forward quote on GBP/JP The current…

A: The theory that states that an investor will not earn arbitrage profit by making investments in…

Q: Purchasing Power Parity A computer costs $430 in the United States. The same model costs €525 in…

A: The objective of the question is to calculate the spot exchange rate between the euro and the dollar…

Q: The spot rate between the U.S. dollar and the Talwan dollar is $1= TWD30.205. Assume the Interest…

A: 1. Interest rate parity (IRP): Interest rate parity (IRP) is a theory according to which the…

Q: a. What is your profit at the current exchange rate? (Do not round intermediate calculations and…

A:

Q: The current spot rate between the U.S. dollar and the Swedish krona Is $1 = 6.8682 krona. Assume the…

A: PURCHASE POWER PARITY  Purchasing Power Parity theory is tells about the price differentials…

Q: Q.6 ABC Limited, is an exporter from UK. His receivables on account of exports to Canada are Can S…

A: The difference between the interest rate of the two countries is equal to the difference between the…

Q: Suppose your company imports computer motherboards from Singapore. The exchange rate is currently…

A: The objective of the question is to calculate the profit under different exchange rate scenarios and…

Q: 46-Mr. Ahmed has to make a payment of 5 million GBP to a UK company after 30 days for the purchase…

A: Currency forward are used for hedging the foreign currency payment.

Q: You have sold a put option on British pound and receive $0.03 per pound. The exercise price is $0.75…

A: Receive amount on the sale of put option=$0.3 per pound Exercise price =$0.75 per British pound…

Q: EXERCISE 20 EXPORSA, an export firm, will collect 100.000 GBP in six months. GBP is quoted with a…

A: Foreign Exchange Market:The foreign exchange (forex or FX) market is where currencies are traded. It…

Q: Spot AUD 0.5800 GBP Spot AUD = 90 Yen Australian Government One Year Yield = 3.4% Australian…

A: The exchange rate is the exchange rate at which two currencies of different countries are traded in…

Q: This is a company in EURO zone dealing with imports/exports in USA. The euro interest rate = 1%…

A: Scenario 1: Company owes 100,000 USD In this scenario, the company owes USD and wants to protect…

Q: P19–1 EXCHANGE RATE MOVEMENTS Suppose a basket of goods in Paris costs €133 and the same basket…

A: Variables in the question:A basket of goods in Paris costs= €133Same basket purchased in New York…

Q: Suppose your company imports computer motherboards from Singapore. The exchange rate is currently…

A: Given: Particulars Amount   Mother boards           30,000   Exchange rate 1.3356 S$/US$…

Q: Calculate the fair forward price

A: The current interest rates in Australia and New Zealand, in addition to the spot exchange rate, are…

Q: Assume you have a foreign currency contract expiring in 3 months. The current price of the future…

A: To determine the fair price of the foreign currency contract, we need to calculate the theoretical…

Q: ABC’s payoff on the forward contract is closest to:

A: Forward Contract: It is an over-the-counter contract between two parties agreeing to purchase or…

Q: i will 10 upvotes urgent Assume that Riverside Corp. from the United States will receive 400,000…

A: The forward market is a financial market in which participants agree to buy or sell an asset at a…

Q: The exchange rates for USD, JPY (Japanese Yen) and OMR are as follows, USD 16.0000/OMR, JPY…

A: Given:

Q: An US Company exported its goods to Oman at US$ 2,000,000 at an exchange rate of US$ 2.5/OMR. Due to…

A: At time of Import 1 OMR = US$ 2.50  Due to changes in Economic conditions, the exchange rate becomes…

Q: This is a company in EURO zone dealing with imports/exports in USA. The euro rate = 1% yearly while…

A: The call option provides the choice of purchasing the underlying asset at the exercise price to its…

Q: 1 5: Assume that You are risk manager at BIC Investment. BIC firm w 5.000.000 USD export transaction…

A: Forward must be according the interest going between the two currencies and should be in equilibrium…

Q: At today's spot exchange rates 1 US doler can be exchanged for 11 Mexican pesos or for 111.47…

A: The cross rate is the exchange rate between two currencies that are not quoted against each other.…

Q: The OMR rate per US Dollar is quoted as OMR 2.4500 - OMR 2.5000 = $1. Company A wants to buy dollars…

A: Bid rate and ask rate refer to the rate quoted by the bank to exchange foreign currency. Where the…

Q: 2- Assume that the export price of a Toyota Corolla from Osaka, Japan is ¥4,200,000. The exchange…

A: Export price = 4,200,00 yen exchange rate = 109.60 yen per dollar US inflation = 2.5% , Japan…

Q: A japanese IMPORTER has a $1,250,000 PAYABLE due in one year. The spot rate is $1V100. The one-year…

A: A forward contract is an agreement between two parties to buy or sell an asset at an agreed price in…

Q: The exchange rates for USD, JPY (Japanese Yen) and OMR are as follows, USD 8.0000/OMR, JPY…

A: USD 8.0000/OMR JPY 0.0800 /USD and to exchange JPY 20000, for OMR

Q: Problem 25-7 (Algo) If the current exchange rate is $1.90 per £, the 1-year forward exchange rate is…

A: Required:Risk-free Dollar Denominated Return=?

Q: The spot rate of Canadian dollars for US dollars is $C1/51 Inflation in Canada is predicted to be 1%…

A: According to PPP, Spot Rate after 1 year is computed using the following formula,   Spot Rate after…

Q: Problem 25-5 (Static) Suppose a U.S. investor wishes to invest in a British firm currently selling…

A: An exchange rate is the price at which one currency can be exchanged for another, and it has an…

Q: Ask Rate 0.510

A: in this we have to convert Hong Kong dollars to US dollars.

Instruments of Foreign Exchange Market

Foreign exchange is a worldwide market in which one nation’s currency is converted into another nation’s currency. In further terms, exchanging of nations currency with foreign currencies. Foreign exchange happens at a specified rate which is termed the foreign exchange rate. The exchange rates are not constant continuously changing as they are derived by market forces of supply and demand. Widely used foreign currencies are the United States- dollar, Euro, Japanese Yen, British pound, and Australian dollar. US- dollar is the most denominated foreign currency. The Euro to US dollar is a widely used currency pair in the forex market as these two currencies represent the world’s enormous economy. Forex trade is simple as exchanging currencies at the bank. The main players of forex markets are the central banks, financial institutions, intermediaries, investments banks, and other banks. Central Bank is the supreme player who decides the currency value of their own nation on the forex market. Mostly foreign exchange-traded at FX market (forex market) when tourists’ visits a foreign country, import, and export happens between two countries.