1. You have an accounts payable to a German exporter for 100 Porsche Cayenne SUVs. The seller offers a 2 percent discount for payment within 10 days and full payment due in 30 days (2/10 net 30). Today the exchange rate is $1.40 per Euro. You notice that the 30 day forward rate for the $/Euro is $1.38?..what should you do? You owe 70,000 Euros for each of the cars (before any discounts). [show your work!] 2. You are changing planes in London for a flight to Paris where you will connect with your flight to Capetown. You are picking up reading material for the flight and are looking at the prices listed on the Economist magazine which conveniently lists prices in several different global currencies. You note that the price in Pounds is 2.40 pounds and the price in Euros is 2 Euros. The exchange rate for the dollar (your credit card was issued in the USA) is $1.59/pound and $1.3837/euro. Should you buy reading materials now or wait until you?re in Paris? 3. Study the Chilean peso exchange rate board photo from January 2014 (in the attachment) Assume you have $C1,000,000 Canadian dollars and that the exchange rate is $1US - $C1.08 in other words the dollar is stronger than the Canadian dollar (one dollar US buys 1.08 Canadian). Is there an arbitrage opportunity here that would allow you to make money? Hint: you need to convert Canadian dollars to US dollars to start.