The exchange rates are £0.6139/$ and $1.3939/£. A payment of $2,000 is to be made to aresident in U.K. How many pounds will the U.K resident receive?A. £ 1,227.80B. £ 1,787.80C. £ 1,257.86D. £ 1,434.82

GIVEN, exchange rate =pound 0.6139/$ exchange rate = $1.3939/pound payment = $2000

The exchange rates are £0.6139/$ and $1.3939/£. A payment of $2,000 is to be made to a esident in U.K. How many pounds will the U.K resident receive? A. £ 1,227.80 B. £ 1,787.80 C. £ 1,257.86 D. £ 1,434.82

The exchange rates are £0.6139/$ and $1.3939/£. A payment of $2,000 is to be made to a esident in U.K. How many pounds will the U.K resident receive? A. £ 1,227.80 B. £ 1,787.80 C. £ 1,257.86 D. £ 1,434.82

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Related questions

Q: The exchange rate is 113 Swiss francs per dollar. How many U.S. dollars are needed to purchase 2,500…

A: In the given case, we have provided the exchange rate of per dollar into swiss francs.And, we have…

Q: The exchange rate between the British pound and the Australian dollar (GBP/AUD) is 0.4220, it means…

A: Exchange rate between the British pound and the Australian dollar (GBP/AUD) is 0.4220

Q: the following cross exchange Dinar/ Lira Rupee/Real Bolivar /Shekel

A: In this you have multiply with other currency to get real exchange rate.

Q: If the exchange rate for Canadian and U.S. dollars is 0.92777 to 1, this implies that 13 Canadian…

A: Value of 1 Canadian dollar in US dollar = 1/0.92777 = 1.07785334727

Q: 2. Take into account a two-year currency swap with semiannual payments. The US dollar is the local…

A: A. We need to use the term structures provided to determine the annualized fixed rates for the two…

Q: a. The rial receivable exchange b. The nial receivable exchange in U.S. dollar value, resulting in a…

A: Foreign currency transaction accounting involves recording transactions in a company's financial…

Q: Assume that Canadian (domestic) interest rate is 6%. EU (foreign) interest rate is 3%. and the…

A: Concept. Interest rate parity theory defines relationship between interest rates and exchange rates…

Q: Currently, the spot exchange rate is $1.56 per £ and the three-month forward exchange rate is $1.58…

A: The objective of the question is to determine whether the interest rate parity (IRP) is currently…

Q: Required: State what are the presumed advantages of using forward exchange contracts. Calculate…

A: Data given::> Invoice amount = $130,000 Payment details: On shipment = $40,000 One month after…

Q: 1. On September 1, 20X1, Cano & Company, a U.S. corporation, sold merchandise to a foreign firm for…

A: There are foreign exchange transactions that take place on credit so that the amount due is paid at…

Q: An Omani investor wants to invest $20000 in US securities. The exchange rates posted by four U.S.…

A: Convert all bank rates into OMR/USD rates: Particulars USD/OMR OMR/USD - Working OMR/USD Bank…

Q: An entity based in Europe with a Euro (EUR) functional currency makes a sale of US$10,000 to a…

A: When an entity in one country sells goods to another entity in different country then such…

Q: On 1st June 2021, Nutella Ltd, an Australian company with a functional currency of A$, entered…

A: Foreign Translation of Currency According to IFRS while accounting for the foreign translation it…

Q: The one-year interest rate is 1.00% in the U.S. and 3.10% in Canada. The current exchange rate of…

A: Using 1 USA = CAD 1.37

Q: Compute the Indirect and Direct Quotations of the following Exchange Rates. Swedish Krona = ?

A: Here,

Q: Suppose Dassie Bank quoted the exchange rate of Singapore dollar in US$ at $0.60, the pound rate in…

A: Currency arbitrage is a strategy that is used by investors to exploit the differences in exchange…

Q: Use the information below to answer the questions that follow. U.S. $ EQUIVALENT CURRENCY PER U.S. $…

A: US DollarForeign currency13.723Poland Zloty10.709Jordan Dinar10.377Bahrain Dinar11.5591New Zealand…

Q: Use the following information on the U.S. dollar value of the pound sterling to answer Forward Rate…

A: b. No effect

Q: XYZ Corporation exchanges Japanese yen (JPY) into US dollars. They exchange 50,000,000 JPY into USD.…

A: JPY to be exchanged = 50,000,000 JPYCurrent exchange rate : 1 JPY = 0.0082 USDCurrency exchange fee…

Q: A company sells Gizmos to consumers at a price of $90 per unit. The costs to produce Gizmos is $38…

A: Operating Cashflow = PAT +Depreciation

Q: The spot exchange rate is $1.98/£. If the expected exchange rate in one year is $2.01/£, and the…

A: Here,Spot price = $1.98Forward price = $2.01U.S. Interest rate = 5%To Find:One-year British interest…

Q: Given exchange rates for two different times 0 and 1 in the following table. So Peso21/$ $1 Peso20/$…

Q: Currently, the spot exchange rate is $1.59 per £ and the three-month forward exchange rate is $1.61…

A: Here,Here,Spot Exchange Rate is $1.59 per £Three Month Forward Exchange Rate is $1.61 per £Three…

Q: Your foreign exchange trader in the United States has quoted the following rates for the Swiss…

A: Here, Swiss Frans/USD Spot 1 Month 3 Month 6 Month $0.5965/72 50/61 127/143 242/267

Q: A New Zealand company needs to make a payment of 600,000 Thai Baht (THB). To do this it needs to…

A: Bid price refers to the price at which the forex trader buys the foreign currency while Ask price…

Q: When the direct rate in the United States for the euro is USD 0.9568 per EUR, the reciprocal rate…

Q: A product sells for $1,000 in the U.S. If the exchange rate between $ and euro is $1 = 0.90 euro,…

A: Given data; Price of product in US = $1,000 Exchange rate between dollar and Euro = $1 = 0.90 euros

Q: e one-year forward rate for the Swiss franc is SF1.1505/$. The spot rate is SF1.1626/$. The interest…

A: Based on the interest rate the spot rate and forward rate must be in equilibruim based on the…

Q: A Taiwanese company is to export electronic equipment into Europe, in particular Germany and Sweden,…

A: A cross rate is referred as a foreign currency exchange transaction between two currencies where…

Q: Given the following exchange rates in the market, what should be the cross exchange rate between…

A: Cross exchange rate is the rate which is determined between two currencies. Both the currencies are…

Q: rates in the table for the following question. As you leave Halifax, you convert 378 Canadian…

A: When anyone travels to another country than one needs the currency of that country and one has to…

Q: What is your profit from exploiting the opportunity once (in $)?

A: Exchange rateBidAskValue of yen in U.S. dollars$0.008$0.0081Value of Canadian dollar in U.S.…

Q: Bento Corporation (a U.S.-based company) acquired merchandise on account from a foreign supplier on…

A: Requirement of the question : Find out the gain or loss due to foreign exchange rate fluctuation in…

Q: Suppose that the current exchange rate is €1.00 = $1.80. The indirect quote, from the U.S.…

A: An indirect quote of currency refers to a method of quoting exchange rates where the domestic…

Q: Assume the following information: U.S. deposit rate for 1 year U.S. borrowing rate for 1 year New…

A: Money Market Hedging is one of the technique used for hedging purposes. It locks in current…

Q: On 15 May 2020 Penn Ltd, an Australian company with functional currency of Australian dollars…

A: Solution:- Preparation of the accounting entries necessary to account for the above purchase…

Q: 1. On May 1, Harris purchased parts from a Japanese company for a U.S. dollar-equivalent value of…

A: Foreign currency transactions in accounting mean those transactions that are denominated by…

Q: Using Exchange Rates Use the information below to answer the following questions. U.S. $…

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

Q: A U.S. company sells a product to a British company with the transaction listed in British pounds.…

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…

Q: Use the information below to answer the following questions. CURRENCY PER U.S. U.S. $ EQUIVALENT…

A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…

Q: Today's spot exchange rate: 1 euro = $1.25. US interest rate (home interest rate) is 7%. EU interest…

A: Part (a): Calculation of forward exchange rate: Answer: Forward exchange rate is $1.37 per euro.

Q: Which one of the following best describes an agreement you make today to exchange U.S. dollars for…

A: Hedging is very important techniques to prevent against future losses and there are many ways to…

Q: Brandt Corp. (a U.S.-based company) sold parts to a South Korean customer on December 1, 2020, with…

A: The transactions which involve exchange rate mechanism can be hedged by using the various derivative…

Q: PL Co purchased goods on credit from a US supplier costing $US 225,000 on 5th June 2020 when the…

A: Foreign exchange gain/loss refers to the increase or decrease in the value of the asset/liability of…

Concept explainers

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.

Question

The exchange rates are £0.6139/$ and $1.3939/£. A payment of $2,000 is to be made to a
resident in U.K. How many pounds will the U.K resident receive?
A. £ 1,227.80
B. £ 1,787.80
C. £ 1,257.86
D. £ 1,434.82

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

(a) Suppose you are a Bangladesh Citizen who is planning to go to USA. Current Exchange Rate is Tk BDT/$ 85/86 and according to your estimation you need 3.5lacs taka for your trip. i. How much BDT do you need to cover your cost of trip? ii. What is the American Quote in this case? (b) The following exchange rates are given AUD/USD 1.1197/1.2135 & AUD/GBP 2.1920/2.2500. What is the European quote for Pounds?
On December 20, 2020, Momeier Company (a U.S.-based company) sold parts to a foreign customer at a price of 45,000 rials. Payment is received on January 10, 2021. Currency exchange rates are as follows: Date U.S. Dollar per Rial December 20, 2020 $ 1.14 December 31, 2020 1.11 January 10, 2021 1.07 How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier’s 2020 income statement? How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier’s 2021 income statement?
Currently, the spot exchange rate is $0.80/A$ and the one-year forward exchange rate is $0.76/A$. One-year interest is 3.5% in the United States and 4.2% in Australia. You may borrow up to $1,000,000 or A$1,250,000, which is equivalent to $1,000,000 at the current spot rate. Determine if IRP is holding between Australia and the United States. Yes O No
Use the following information on the U.S. dollar value of the euro to answer the question. Forward Rate for Spot Rate April 30, 2024 Delivery $1.130 $1,140 October 20, 2023 November 1, 2023 December 31, 2023 April 30, 2024 Select one: 1.148 1.100 1.170 On October 30, 2023, a US company receives a purchase order from a customer in Spain. Under the sale terms, the customer will pay the company €100.000 on April 30; 2024 On October 30, the US company also enters a forward contract to sell €100,000 on April 30, 2024. The company delivers the merchandise to the customer on November 1, On April 30, the company receives €100,000 from the customer and sells it using the forward contract. The company's accounting year ends December 31. What net gain or loss is recognized in 2023, in addition to sales revenue? esc a $500 net loss b. 1800 net gain, c. $800 net loss d. $500 net gain 3.145 1165 1.170 * 8: MacBook Air & FL 40 # 6-41 16 W 19 F M m
VALUE OF EURO (U.S. dollars per euro) 1.9 1.8 1.7 1.6 1.5 1.4 1.3 1.2 1.1 0 50 100 150 200 250 300 350 400 450 500 550 600 QUANTITY OF EUROS (Billions) At an exchange rate of 1.5 per euro, the quantity of euros demanded is of euros demanded is + (?) billion euros, while at an exchange rate of 1.1 per euro, the quantity sloping. billion euros. This confirms that the demand curve for euros is
As a foreign exchange trader at a Citibank, you are given the following quotations: 2-month forward 1-month Exchange Rate Spot Rate forward 1 Singapore Dollar (S$) 100 Japanese Yen (100\) 1 Australian Dollar (AUD) RM3.0500/10 RM3.5000/30 RM3.1010/40 20/70 25/65 45/35 60/50 35/70 65/55 Country Malaysia Japan Singapore Rate 15% 3-Month interest rate 10% 20% Calculate: If you as a foreign exchange trader are expected to receive S$5,000 in 1 months' time, how much is it pay in RM? ii.
An U.S. firm requires C$230,000 in 90 days to pay the imports from Canada. To avoid currency exchange rate risk, it needs to __________ A. purchase Canadian dollars (C$) 90 days from now at the spot rate B. obtain a 90-day forward sale contract on Canadian dollars (C$) C. obtain a 90-day forward purchase contract on Canadian dollars (C$) D. sell Canadian dollars (C$) 90 days from now at the spot rate
Using the currency cross rate table, convert C$300.00 to Japanese yen. Canadian dollar U.S. dollar Euro Japanese yen British pound Australian dollar Canadian U.S. Euro Japanese British Australian dollar dollar yen pound dollar 1.5792 0.0129 2.2735 1.1601 0.0078 1.6624 0.0083 1.4355 197.1834 1.4103 0.7091 0.6332 0.8620 77.5194 128.2051 120.4819 0.4399 0.6015 0.6966 1.1012 1.4945 1.7319 C$300.00 will purchase Japanese yen. (Round to the nearest yen as needed.) 0.0051 0.0126 2.4907 0.9081 0.6691 0.5774 79.4098 0.4015
What is the External PPP of 33876 OMR at Kuwait, if price level in Kuwait is 10,000 KWD and exchange rate is: 0.75 KWD / OMR? Select one: a. 4.517 b. 1.270 c. 2.541 d. 55168.000
On December 20, 2020, Momeier Company (a U.S.-based company) sold parts to a foreign customer at a price of 175,000 rials. Payment is received on January 10, 2021. Currency exchange rates are as follows: Date U.S. Dollar per Rial December 20, 2020 $ 1.27 December 31, 2020 1.24 January 10, 2021 1.20 How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier’s 2020 income statement?
3. On October 1, IJR International received an order from a Japanese customer for 2,500,000 Yen to be paid upon receipt of the goods, scheduled for December 1. The rates for $1 US are as follows: Spot rate, October 1 Forward rate, December 1 Spot rate, December 1 Exchange Rates for $1 for Yen 83 82 81 (a) Calculate what IJR would receive from the Japanese customer in US dollars using the spot rate at the time of the order. (b) Calculate what IJR would receive from the Japanese customer in US dollars using the spot rate at the time of payment. (c) Calculate the amount that IJR expects to receive on December 1 if IJR's policy is to hedge foreign currency transactions. (d) How can IJR protect itself from the risk of the transaction?
On December 20, 2023, Momeier Company (a U.S.-based company) sold parts to a foreign customer at a price of 165,000 rials. Payment is received on January 10, 2024. Currency exchange rates are as follows: DateU.S. Dollar per RialDecember 20, 2023$ 1.26December 31, 20231.23January 10, 20241.19 Required: How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier's 2023 income statement? How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier's 2024 income statement? a. The rial receivable exchange b. The rial receivable exchange S in U.S. dollar value, resulting in a foreign of in 2023. in U.S. dollar value, resulting in a foreign of in 2024.

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS