Principles Of Finance/FIN 472

Chapter 11

International Finance

1.Briefly discuss how an increase in the value of the U.S. dollar would impact

a)A US investor with significant foreign investments

b)A foreign investor with significant US investments

c)The U.S. consumer

d)A US-based manufacturer that sells its products internationally

e)A foreign-based manufacturer that sells its products in the US.

Alternative Assignment 11

1.Problem 2.

Our sales staff has reached an agreement to sell our product to a large customer in Argentina. Normally the product sells for $455 per 25 units. How much must we charge in Argentina Pesos to get the same price? Assume that the exchange rate is 3.0875 Pesos/$?

2.Problem 3.

Today the exchange rate is 1.1304 Canadian Dollars per US$. Last year, the exchange rate was 1.0422 Canadian Dollars per US$. Has the US$ strengthened or weakened relative to the Canadian Dollar over the last year?

3.Problem 5.

We know that the Japanese Yen/US $ exchange rate is 118.43 yen/$. Also, the Mexican Peso/US$ exchange rate is 10.998 pesos/$. What is the yen/peso exchange rate? What is the peso/yen exchange rate?