Fundamentals of Financial Management (MindTap Course List)
14th Edition
ISBN: 9781285867977
Author: Eugene F. Brigham, Joel F. Houston
Publisher: Cengage Learning
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Chapter 19, Problem 5P
Summary Introduction
To identify: The dollars required to buy different currencies.
Introduction:
Foreign Exchange Rate: Foreign exchange rate refers to the rate required to obtain a currency in other country’s currency.
Direct Rate: According to home currency direct rate is rate in home currency required to buy one unit of another country’s currency.
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Students have asked these similar questions
The table lists foreign exchange rates for August 30, 2018. On that day, how many dollars would be required to purchase 1,000 units of each of the following: British pounds, Canadian dollars, EMU euros, Japanese yen, Mexican pesos, and Swedish kronas? Use the direct quotation for your calculations. Round your answers to the nearest cent.
Sample Exchange Rates: Thursday, August 30, 2018
Direct Quotation:U.S. Dollars Required toBuy One Unit ofForeign Currency(1)
Indirect Quotation:Number of Units ofForeign Currency perU.S. Dollar(2)
Australian dollar
0.7264
1.3767
Brazilian real
0.2409
4.1504
British pound
1.3009
0.7687
Canadian dollar
0.7702
1.2984
Chinese yuan
0.1461
6.8448
Danish krone
0.1565
6.3889
EMU euro
1.1670
0.8569
Hungarian forint
0.00357015
280.10
Israeli shekel
0.2767
3.6136
Japanese yen
0.00901
110.99
Mexican peso
0.0523
19.1133
South African rand
0.0679
14.7205
Swedish krona
0.1096
9.1200
Swiss franc
1.0317
0.9693
Venezuelan bolivar…
Introduction to Exchange Rates and the Foreign Exchange Market - EOC
Refer to the exchange rates given in the table to answer the questions. Please round your answer to the nearest ten thousandths.
Country (currency)
January 20, 2016
FX per $
January 20, 2015
FX per £
FX per €
FX per $
Australia (dollar)
1.459
2.067
1.414
1.223
Canada (dollar)
1.451
2.056
1.398
1.209
Denmark (krone)
6.844
9.694
7.434
6.430
Eurozone (euro)
0.917
1.299
1.000
0.865
Hong Kong (dollar)
7.827
11.086
8.962
7.752
India (rupee)
68.05
96.39
71.60
61.64
Japan (yen)
116.38
164.84
136.97
118.48
Mexico (peso)
18.60
26.346
16.933
14.647
Sweden (krona)
8.583
12.157
9.458
8.181
United Kingdom (pound)
0.706
1.000
0.763
0.600
United States (dollar)
1.000
1.416
1.156
1.000
a. What was the US dollar to Japanese yen exchange rate on January 20, 2016?
116.38
Es
Incorrect
b. What was the US dollar to Japanese yen exchange rate on January 20, 2015?
ES:
118.48
Incorrect
c. What was the percentage change in the value of the US…
TIPS FOR READING AN EXCHANGE RATE CHART: Read down the chart. For example, in column 1 it says the US Dollar is equal to each of the currencies below it. Therefore $1 = .76 £ or $1 = .89 €.
Exchange Rate Table for Month 1
US Dollar
$1 =
British Pound
1 £ =
Chinese Yuan
1 Y =
Japanese Yen
1 ¥ =
Euro
1€
US Dollar
---
1.32
.16
.0088
1.13
British Pound
.76
---
.12
.0067
.85
Chinese Yuan
6.37
8.46
---
.056
7.21
Japanese Yen
113.04
149.55
17.75
---
127.55
Euro
.89
1.17
.14
.0078
---
Exchange Rate Table for Month 2
US Dollar
$1 =
British Pound
1 £ =
Chinese Yuan
1 Y =
Japanese Yen
1 ¥ =
Euro
1€
US Dollar
---
1.40
.20
.0080
1.17
British Pound
.70
---
.11
.0065
.89
Chinese Yuan
6.20
8.72
---
.062
7.59
Japanese Yen
116.24
146.89
16.32
---
117.2
Euro
.92
1.11
.15
.0078
---
A currency depreciates (or gets…
Chapter 19 Solutions
Fundamentals of Financial Management (MindTap Course List)
Ch. 19 - Why do U.S. corporations build manufacturing...Ch. 19 - Prob. 2QCh. 19 - Prob. 3QCh. 19 - Should firms require higher rates of return on...Ch. 19 - Does interest rate parity imply that interest...Ch. 19 - Prob. 6QCh. 19 - Prob. 7QCh. 19 - Prob. 1PCh. 19 - Prob. 2PCh. 19 - Prob. 3P
Ch. 19 - Prob. 4PCh. 19 - Prob. 5PCh. 19 - Prob. 6PCh. 19 - CURRENCY APPRECIATION Suppose that 1 Danish krone...Ch. 19 - Prob. 8PCh. 19 - Prob. 9PCh. 19 - Prob. 10PCh. 19 - Prob. 11PCh. 19 - INTEREST RATE PARITY Assume that interest rate...Ch. 19 - Prob. 13PCh. 19 - EXCHANGE GAINS AND LOSSES You are the vice...Ch. 19 - Prob. 15PCh. 19 - Prob. 16PCh. 19 - FOREIGN CAPITAL BUDGETING Solitaire Machinery is a...Ch. 19 - Prob. 19IC
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- EXCHANGE RATES Table 17.1 lists foreign exchange rates for August 30, 2018. On that day, how many dollars would be required to purchase 1,000 units of each of the following: British pounds, Canadian dollars, EMU euros, Japanese yen, Mexican pesos, and Swedish kronas?arrow_forwardTIPS FOR READING AN EXCHANGE RATE CHART: Read down the chart. For example, in column 1 it says the US Dollar is equal to each of the currencies below it. Therefore $1 = .76 £ or $1 = .89 €. Exchange Rate Table for Month 1 US Dollar $1 = British Pound 1 £ = Chinese Yuan 1 Y = Japanese Yen 1 ¥ = Euro 1€ US Dollar --- 1.32 .16 .0088 1.13 British Pound .76 --- .12 .0067 .85 Chinese Yuan 6.37 8.46 --- .056 7.21 Japanese Yen 113.04 149.55 17.75 --- 127.55 Euro .89 1.17 .14 .0078 --- Exchange Rate Table for Month 2 US Dollar $1 = British Pound 1 £ = Chinese Yuan 1 Y = Japanese Yen 1 ¥ = Euro 1€ US Dollar --- 1.40 .20 .0080 1.17 British Pound .70 --- .11 .0065 .89 Chinese Yuan 6.20 8.72 --- .062 7.59 Japanese Yen 116.24 146.89 16.32 --- 117.2 Euro .92 1.11 .15 .0078 --- An American family goes on vacation…arrow_forwardTIPS FOR READING AN EXCHANGE RATE CHART: Read down the chart. For example, in column 1 it says the US Dollar is equal to each of the currencies below it. Therefore $1 = .76 £ or $1 = .89 €. Exchange Rate Table for Month 1 US Dollar $1 = British Pound 1 £ = Chinese Yuan 1 Y = Japanese Yen 1 ¥ = Euro 1€ US Dollar --- 1.32 .16 .0088 1.13 British Pound .76 --- .12 .0067 .85 Chinese Yuan 6.37 8.46 --- .056 7.21 Japanese Yen 113.04 149.55 17.75 --- 127.55 Euro .89 1.17 .14 .0078 --- Exchange Rate Table for Month 2 US Dollar $1 = British Pound 1 £ = Chinese Yuan 1 Y = Japanese Yen 1 ¥ = Euro 1€ US Dollar --- 1.40 .20 .0080 1.17 British Pound .70 --- .11 .0065 .89 Chinese Yuan 6.20 8.72 --- .062 7.59 Japanese Yen 116.24 146.89 16.32 --- 117.2 Euro .92 1.11 .15 .0078 --- An American company contracts a…arrow_forward
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