Finance 534 Week 11 Quiz 10

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Finance 534 week 11 quiz 10Question 1Suppose DeGraw Corporation, a U.S. exporter, sold a solar heating station to a Japanesecustomer at a price of 143.5 million yen, when the exchange rate was 140 yen per dollar.Inorder to close the sale, DeGraw agreed to make the bill payable in yen, thus agreeing to takesome exchange rate risk for the transaction.The terms were net 6 months.If the yen fellagainst the dollar such that one dollar would buy 154.4 yen when the invoice was paid, whatdollar amount would DeGraw actually receive after itexchanged yen for U.S. dollars?Correct Answer:$929,404Question 2Suppose 144 yen could be purchased in the foreign exchange market for one U.S. dollartoday.If the yen depreciates by 8.0% tomorrow, how many yen could one U.S. dollar buytomorrow?Correct Answer:155.5 yenQuestion 3Suppose one British pound can purchase 1.82 U.S. dollars today in the foreign exchangemarket, and currency forecasters predict that the U.S. dollar will depreciate by 12.0% againstthe pound over the next 30 days. How many dollars will a pound buy in 30 days?AnswerCorrect Answer:2.04Question 4Suppose 6 months ago a Swiss investor bought a 6-month U.S. Treasury bill at a price of$9,708.74, with a maturity value of $10,000.The exchange rate at that time was 1.420Swiss francs per dollar.Today, at maturity, the exchange rate is 1.324 Swiss francs per

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