Suppose the exchange rate value of the dollar depreciates. Instructions: In order to receive full credit, you must make a selection for each option. For correct answer(s), click the option once to place a check mark. For incorrect answer(s), click the option twice to empty the box. Who are the winners? People who want to buy foreign assets Firms that export goods People who want to buy assets in this country People who travel abroad Firms that import goods People who travel to this country.
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- 1. What is the exchange rate between the U.S. and Germany? Has there been appreciation or depreciation of the U.S. dollar relative to Germany's currency? 2. As a manager, how does this affect your decision to expand into Germany? Will it affect your costs or ability to produce in Germany? 3. Would you recommend your firm expand into Germany? If so, would you produce the product/service in Germany? Would you expand to sell the product/service to a new target market? If you don’t think your firm should expand into Germany, why?Only typed answer If you are an American, and you agree to pay 100 Euro to another person in 6 months, who bears the currency fluctuation risk----you or the person you will pay? Why?You own a local company. In the past year, you successfully expanded your sales market into Europe, and you now have profits and cash denominated in euros. You want to convert the euros to your home country currency to repatriate the profits and pay taxes. You are a. not required to convert the euros to the home currency to pay taxes. b. a demander of the euro in the foreign exchange market. c. a supplier of your home country's currency in the foreign exchange market. d. a demander of your home country's currency in the foreign exchange market.
- If the U.S. dollar appreciates relative to the Euro then, (all else constant) A) U.S. exports will increase B) U.S. imports will increase C) No change in U.S. imports or exports will occur D) All are possible10 You work for a Panamanian importing company. You import car radios from a Japanese supplier. Under the terms of the last contract, you must pay 30 millions Japanese yen in 60 days. Explain the alternatives that you have to reduce the exchange rate risk. no plagiarismThe Central American country of Belize is one of approximately 14 Caribbean community countries that pegs its currency to the U.S. dollar. The pegged rate is 2 Belize dollars equal 1 U.S. dollar (2 BZD = 1 USD or 1 BZD = 0.50 USD). This is illustrated in the figure below. Exchange Rate (USD BZD) 2.00 1.00 0.50 D Quantity of Belize dollars traded per day How will the actions of speculators affect this market? O The Belize dollar supply curve will shift to the right and the Belize dollar demand curve will shift to the left. O The Belize dollar supply curve and the Belize dollar demand curve will shift to the right. O The Belize dollar supply curve will shift to the left and the Belize dollar demand curve shift to the right. The Belize dollar supply curve and the Belize dollar demand curve will shift to the left.
- 4. What factors will shift the supply and demand for currency?2. Analyze the data from China, Japan, Switzerland, Indonesia, Ukraine, and Taiwan (6 countries), and fill in the table as follow showing overvalued and undervalued currencies. (10%) Write a conclusion stating why PPP doesn't hold true according to the actual data. (10%) Country Local dollar Implied PPP Actual of the dollar price 1 United States China Indonesia Switzerland Ukraine Taiwan 5 20 30000 6.5 54 69 exchange rate 1 6.8 14000 0.9 28 30 Under/over against the dollar 0% valuationWhat is the Foreign Exchange Markets of LG Electronics?
- A. An exporter in the U.S is planning to ship $10,000,000 worth of automobiles to Germany in 6 months. What kind of foreign currency event should the exporter hedge against? What could happen if the exporter did not hedge? B. The selling price of 3-month forward U.K. pound sterling is $1.7107 and, the spot rate for pounds the selling price is $1.8953. Calculate the per annum percentage premium or discount in the forward rate.Currency Exchange Vietnamese bank rate Saigon Airport exchange bureau rate Hotel exchange bureau rate Assuming an intial cash amount for exchange to dong of: Page Rate d19,800 d19,500 d19,400 Problem 4 Vietnamese Coffee Coyote Many people were surprised when Vietnam became the second largest coffee producing country in the world in recent years, second only to Brazil. The Vietnamese dong, VND or d, is managed against the U.S. dollar but is not widely traded. If you were a traveling coffee buyer for the wholeale market (a "coyote" by industry terminology), which of the following currency rates and exchange commission fees would be in your best interest if traveling to Vietnam on a buying trip? 4 $10,000.00 > of 6 Commission 2.50% 2.00% 1.50%_______Refers to the market for national currencies of different countries in the world?