worth of machines. When the deal was signed‚ Pfeiffer calculated that at the agreed price‚ the machines would yield a profit of € 30‚000 each. Within three days that profit had declined by €8‚000 due to adverse depreciations in dollar as DaimlerChrysler used to pay Elotherm in dollars. Udo Pfeiffer‚ the CEO of SMS Elotherm neglected this issue and fell into serious trouble and it went from bad to worse because due to intense competition‚ it could not charge higher prices for the tools. On the other hand
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b) Sell Thai baht to Sobat Bank (THB 4‚405‚286.34 × $0.0228) = 100‚440.53 c) Dollar profit ($100‚440.53 – $100‚000) = 440.53 2. Besides the bid and ask quotes for the Thai baht provided in the previous question‚ Minzu Bank has provided the following quotations for the U.S. dollar and the Japanese yen: | Quoted Bid Price | Quoted Ask Price | Value of Japanese yen in U.S. dollars | $.0085 | $.0086 | Value of Thai baht in Japanese yen | Y2.69 | Y2.70 | Determine whether
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General Issues The common issues with ‘Bitcoin’ and ‘Linden Dollars’ are that there have been suspicions these virtual currency schemes are operating as Ponzi schemes‚ there is a high level of anonymity with regards to these virtual currency schemes and that there is only one regulator who oversees the system. The issue of Ponzi schemes are justified for virtual currency schemes such as ‘Bitcoin’ and ‘Linden Dollars’ but for different reasons. For ‘Bitcoin’ it greatly resembles a Ponzi scheme where
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the Foreign Exchange Risk faced by the LUFTHANSA? Ruhnau expected if the U.S. dollar continued to appreciate‚ it would reach 3.3DM/USD and at the same time he also personally believed that the DM/USD exchange rate would fall from 3.17DM/USD to between 2.45 and 2.40 DM/USD by January 1986. Unfortunately‚ he was not sure when this depreciation would start. If it did not start before January 1986‚ he felt the U.S. dollar could be as high as 3.40 DM/USD in January 1986. 2. What alternatives
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Risk Management Problem Set II Risk Management Problem Set II 17-1 (Spot exchange rates) An American Business needs to pay (a) 10‚000 Canadian dollars‚ (b) 2 million yen and (c) 50‚000 Swiss francs to business abroad. What are the dollar payments to the respective countries? A) 10‚000 ( Canadian $) x .8437 ( U.S. $/Canadian $) =$8‚437 B) 2‚000‚000 (Yen) x .004684 ($/Yen) = $9‚368 C) 50‚000 (Swiss franc) x .5139 ($/Swiss franc) = $25‚697. 17-2 (Spot exchange rates)
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Currency Conversion Test Procedure Display Menu Test Cases Test Case 1: Valid Selection = Canadian Dollars Inputs: Menu Selection = 1 Expected Outputs: “Do you want to continue with the conversion: Y = Yes‚ N = No” Currency Type = 1 Test Case 2: Invalid Selection = Russian Rubels Inputs: Menu Selection = > 5 Expected Outputs: “Invalid menu selection‚ please pick a different selection.” Test Case 3: Quit = N Inputs: Quit = N Expected Outputs: “Do you want to continue
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5: RUBY STILETTOS BY STUART WEITZMAN PRICE: 1.6 MILLION US Dollars The prettiest among the shoes in the list is the Ruby Stilts by again‚ the master shoe maker. The shoes were inspired by the Wizard of Oz‚ which explains its ruby gem simplicity. This is made up of 643 pieces of rubies with a 123 karat in value and furnished with a pound of platinum. If you are in the mood to spice up your look for the night‚ then this would be perfect for you. Unleash that lady in red tonight. Pair it up with a little
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convert the British pounds received into dollars for the Sports Exports Company at the prevailing spot rate. 2. Explain how the Sports Exports Company is exposed to exchange rate risk and how it could use the forward market to hedge this risk. ANSWER: The Sports Exports Company is exposed to exchange rate risk‚ because the value of the British pound will change over time. If the pound depreciates over time‚ the payment in pounds will convert to fewer dollars. The Sports Exports Company could engage
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because of the decline in value of the U.S. dollar in relation to other countries in which the firm was operating in. For instance a good majority of their product was made in England at a time when the pound was at an all-time high which made the cost of selling the good in the U.S. dollar extremely expensive to American firms. Also their operations in Germany were halted because they German mark was appreciating in value at the same time the United States dollar was depreciating which made it too hard
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currencyType >= 1 and currencyType 6 \ to drop into the Do While loop) Do While (currencyType < 1 OR currencyType > 6) Display "Currency conversion program" Display "Please make a selection" Display "1: Canadian Dollars" Display "2: Mexican Pesos" Display "3: English Pounds" Display "4: Japanese Yen"
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