Vivek owns a business in Ontario, but 90% of his business is exported to the United States. He has a contract with an American company to sell USD$500,000 worth of product. Delivery is in 60 days. Vivek knows the CAD is at $0.92 today, but is expected to drop to $0.89 in 60 days.

a) calculate the price of the shipment in CAD if the American company paid today when it ordered.

b) Calculate the price of the shipment in CAD if the American company pays on delivery in 60 days.

c) What is it called when the value of a currency goes down?

d) When should Vivek ask for the payment? How much more does he make if he receives the highest possible payment?

e) Why would Vivek quote his price in USD?

f) What are the risks of quoting in USD?

g) If Vivek had asked for payment in CAD, what could the American company do to save money? What is this called?