Question
Spot and forward rates Anderson Australian Imports has agreed to purchase 15,000 cases of Australian beer for 5 million Australian dollars at today's spot rate.
Spot and forward rates
Anderson Australian Imports has agreed to purchase 15,000 cases of Australian beer for 5 million Australian dollars at today's spot rate. The firm's financial manager, Linda Wilson, has noted the following current spot and forward rates:
U.S. Dollar/Australian Dollar | Australian Dollar/U.S. Dollar | |
Spot | 1.0757 | 0.9296 |
30-day forward | 1.0711 | 0.9336 |
90-day forward | 1.0631 | 0.9406 |
180-day forward | 1.0230 | 0.9775 |
On the same day, Wilson agrees to purchase 15,000 more cases of beer in 3 months at the same price of 5 million Australian dollars.
What is the price of the beer in U.S. dollars if it is purchased at today's spot rate? Round your answer to the nearest cent. $ {C}
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. $
If the exchange rate for the Australian dollar is 0.9131 to $1 in 90 days, how much will Wilson have to pay for the beer (in U.S. dollars)? Round your answer to the nearest cent. $
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