Question
Tunisian Firm X imports equipment from German Firm Z. With the volatility of the Tunisian dinar against the Euro, Firm X and Firm Z agree
Tunisian Firm X imports equipment from German Firm Z. With the volatility of the Tunisian dinar against the Euro, Firm X and Firm Z agree to a risk-sharing arrangement. First, they set the current spot rate of 3.26DT/ as the base rate. If the spot rate stays within 4% (up or down) of the base rate, then the base rate is used to compute payment. If the spot rate is outside of the 4% range, then Firms X and Z will evenly split the difference between the spot rate and the base rate. The agreement is for the next year.
At the next payment in 4 months, what amount is paid in Tunisian dinars if the spot rate is 3.30DT/ and the sale is for 200,000? (No currency label or decimals or commas are necessary, answer in DTs)
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