(Spot exchange rates) An American business pays $10,000, $15,000, and $20,000 to
ID: 2766000 • Letter: #
Question
(Spot exchange rates) An American business pays $10,000, $15,000, and $20,000 to suppliers in, respectively, Japan, Switzerland, and Canada. How much, in local currencies, do the suppliers receive?
Country
Contract
$/ Foreign currency
Canada-dollar
Spot
0.8437
30-day
0.8417
90-day
0.8395
Japan-yen
Spot
0.004684
30-day
0.004717
90-day
0.004781
Switzerland-franc
Spot
0.5139
30-day
0.5169
90-day
0.5315
Country
Contract
$/ Foreign currency
Canada-dollar
Spot
0.8437
30-day
0.8417
90-day
0.8395
Japan-yen
Spot
0.004684
30-day
0.004717
90-day
0.004781
Switzerland-franc
Spot
0.5139
30-day
0.5169
90-day
0.5315
Explanation / Answer
A. $10,000 x 1/0.004684(Yen)
=$10,000 x 213.4927412=$2,134,927 Yens
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B. $15,000 x 1/0.5139(Swiss franc)
$15,000 x1.946 =29,189 Swiss Francs
--------------------------------------------------------------------------------------------
C. $20,000 x 1/0.8437 (Canadian)
=$20,000 x =23,705 Canadian-dollar
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