1.At today's spot exchange rates 1 U.S. dollar can be exchanged for 7 Mexican pesos or for 112 Japanese yen. You have pesos that you would like to exchange for yen. What is the cross rate between the yen and the peso; that is, how many yen would you receive for every peso exchanged?

2. Y Imports has agreed to purchase 11,000 bags for 500,000 British pounds at today's spot rate. The current and forward spot rates are as follows:

US dollar/British poundBritish pound to US dollar

Spot1.51100.5128

30-day forward1.55400.5056

90-day forward1.54600.5075

180-day forward1.54000.5088

On the same day, Y agrees to purchase 11,500 more bags in 3 months at the same price of 500,000 British pounds.

What is the cost of the bags in US dollars, if purchased at today's spot rate ?

What is the cost in dollars of the second 11,500 order if payment is made in 90 days and the spot rate at the time equals today's 90-day forward rate ?

If the exchange rate is 0.55 British pounds per dollar in 90 days, how much will Y have to pay (in dollars) for the bags ?