Question
QUESTION 28 Your firm is located in the U.S. and a major customer is located in Europe. Due to historical negotiations, your customers pay your
QUESTION 28
Your firm is located in the U.S. and a major customer is located in Europe. Due to historical negotiations, your customers pay your firm in Euros. Your firm has just recorded a sale to the customer for 50,000,000. The customer has 30 days to pay the invoice. The current spot rate is 1 = $1.38. The foreign exchange expert at your firm believes that the FX rate in 30 days will either be 1 = $1.10 or 1 = $1.50. What is the US$ value of this sale at the current spot rate?
| a. | $55,000,000 | |
| b. | $69,000,000 | |
| c. | $75,000,000 | |
| d. | $50,000,000 |
1 points
QUESTION 29
Your firm is located in the U.S. and a major customer is located in Europe. Due to historical negotiations, your customers pay your firm in Euros. Your firm has just recorded a sale to the customer for 50,000,000. The customer has 30 days to pay the invoice. The current spot rate is 1 = $1.38. The foreign exchange expert at your firm believes that the FX rate in 30 days will either be 1 = $1.10 or 1 = $1.50. Assuming that the US$ depreciates, what is the expected US$ value of this sale at the future exchange rate?
| a. | $55,000,000 | |
| b. | $69,000,000 | |
| c. | $50,000,000 | |
| d. | $75,000,000 |
1 points
QUESTION 30
Your firm is located in the U.S. and a major customer is located in Europe. Due to historical negotiations, your customers pay your firm in Euros. Your firm has just recorded a sale to the customer for 50,000,000. The customer has 30 days to pay the invoice. The current spot rate is 1 = $1.38. The foreign exchange expert at your firm believes that the FX rate in 30 days will either be 1 = $1.10 or 1 = $1.50. Assuming that the US$ appreciates, what is the expected US$ value of this sale at the future exchange rate?
| a. | $55,000,000 | |
| b. | $69,000,000 | |
| c. | $50,000,000 | |
| d. | $75,000,000 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
How To Analyse Bank Financial Statements
Authors: Thomas Padberg
1st Edition
0857195182, 978-0857195180
