Exchange Rate Risk Suppose your company imports computer motherboards from Singapore. The exchange rate is given in
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Exchange Rate Risk Suppose your company imports computer motherboards from Singapore. The exchange rate is given in Figure 31.1. You have just placed an order for 30,000 motherboards at a cost to you of 168.5 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $145 each. Calculate your profi t if the exchange rate goes up or down by 10 percent over the next 90 days. What is the breakeven exchange rate? What percentage rise or fall does this represent in terms of the Singapore dollar versus the U.S. dollar? LO.1
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