Question
Arvin Australian Imports has agreed to purchase 15,000 cases of Australian wine for 5 million Australian dollars at today's spot rate. The firm's financial manager,
Arvin Australian Imports has agreed to purchase 15,000 cases of Australian wine for 5 million Australian dollars at today's spot rate. The firm's financial manager, Sarah, has noted the following current spot and forward rates:
U.S. Dollar/ Australian Dollar | Australian Dollar/ U.S. Dollar | |
Spot | 0.7259 | 1.3776 |
30-day forward | 0.7264 | 1.3767 |
90-day forward | 0.7279 | 1.3738 |
180-day forward | 0.7289 | 1.3719 |
On the same day, Sarah agrees to purchase 15,000 more cases of wine in 3 months at the same price of 5 million Australian dollars.
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What is the price of the wine in U.S. dollars if it is purchased at today's spot rate? Round your answer to the nearest cent.
$
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What is the cost in U.S. dollars of the second 15,000 cases if payment is made in 90 days and the spot rate at that time equals today's 90-day forward rate? Round your answer to the nearest cent.
$
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If the exchange rate for the Australian dollar is 1.29 to $1 in 90 days, how much will Sarah have to pay for the wine (in U.S. dollars)? Round your answer to the nearest cent.
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