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Sample Test Problems

  • 21.1 Creighton Industries purchased €1,234,970 worth of electrical supplies from a German store three months ago. The payment in euros is due today, and the firm has been quoted a spot rate of $1.3163/€ by its bank. What is the dollar cost of Creighton's purchase?
  • 21.2 Traynor Corp. made a sale worth 27.3 million yen (¥) today to a Japanese firm. The yen/dollar spot rate on the Japanese yen today is ¥79.37/$. How much is the sale worth in dollars if the revenue is to be received today? The firm expects to receive payment after 30 days. The one-month forward rate is quoted as ¥81.45/$. How much will the firm receive in one month if the payment is converted at the forward rate?
  • 21.3 If the spot rate on the Canadian dollar is C$1.3357/€ and the 90-day forward rate is C$1.3614/€, what is the forward premium or discount on the Canadian dollar against the euro?

  

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