Paper Instructions

Foreign Exchange Assignment
Use the chart supplied by professor and use the date of February 6, 2018 unless otherwise indicated

1) If you converted $75 USD into the following currencies, how much of the foreign currency would you have?
On Feb 6, 2018 On Feb 6, 2017 (1 year ago)
British Pounds
Canadian $
Japanese Yen
Euros
Argentina Pesos

2) How much would the following amounts be worth in US$?

On Feb 6, 2018 On Feb 6, 2017 (1 year ago)
2000 Danish Kroner
2000 Canadian Dollars
2000 Colombian Pesos
2000 Euros

3) How many US$ would it take to be a millionaire in Indonesia?

4) What is the USD$ price of these various products?
Hamburger in Canada = 12.50 dollars
Hamburger in Hong Kong = 78.20 dollars
Hamburger in Australia = 12.70 dollars
Hamburger in US = 10.00 dollars

5) One year ago you converted 1,000 $USD into Argentine Pesos and deposited them in a bank.
a. How many Pesos did you receive?
b. If you earned 3.68% interest, at the end of the year on Feb 6, how many Pesos did you have?
c. If you converted the Pesos back to $USD at the current rate, how many $USD would you end up with?

6) One year ago you invested $1,000 into a Euros bank account.
a. How many Euros did you receive?
b. If you earned 0.7% interest, at the end of the year on Feb 6, how many Euros did you have?
c. If you converted the Euros back to USD$ at the current rate, how many $USD would you end up with?

7) A US company is importing German beer. Each container of beer costs 1000 Euros.
a. How much did it cost in $USD one year ago (Feb 6, 2017)
b. How much does it cost in $ now?

8) One year ago, a US company sold an order of tractor equipment to a company in Japan, who agreed to pay 112 Million JPY.

a. How much was this worth in USD at the time the contract was signed?
b. How much was this worth in USD when they collected the money on Feb 6, 2018?

9) One year ago, a US company sold an order of software to Czech Republic, who agreed to pay $USD 1 Million

a. How much was this worth in US Dollars at the time the contract was signed?
b. How much was this worth in US Dollars when they collected the money on Feb 6, 2018?

c. How many Czech Korunas did the Czech company have to pay to get the $1MM USD if they exchanged the money on day contract was signed one year ago?
d. How many Czech Koruna did the Czech company have to pay to get the $1MM USD if they exchanged the money on the day the payment was due on Feb 6, 2018?

10) If the same contract above instead was for payment of 25.2 million Czech Korunas
a. How much was this worth in USD at the time the contract was signed?
b. How much was this worth in USD when payment was made, one year later?

11) You are a connected government official in Venezuela, who can buy US Dollars at the official rate of 10 Venezuelan Bolivars = 1USD. You can then sell these Dollars for 226,317 Bolivars each on the black market. How many Bolivars profit could you make if you had 1,000 Bolivars to exchange?

12) A kilo of rice at a store in Lagos costs 375 Nigerian Naira

The Nigeria black market Dollar exchange rate is 1 USD to NGN 360
The current official exchange rate of the Dollar to Naira today is: 1 USD = NGN 305

a. How many $USD does this rice cost at the official rate of 280:1?
b. How many $USD does this rice cost at black market rate of 380:1?

13) This chart is from an exchange in London, United Kingdom. It shows the amount of foreign currency that is equal to one British Pound.

a. If you are exchanging 150 GB Pounds, how many USD will you get?
b. If you want to buy 150 pounds, how much will it costs you in $USD?

14) This chart above is from an exchange in Los Angeles, USA. This chart shows the value of one unit of foreign currency measured in $USD. For example, it shows that one Swedish krona is worth about 11 cents ($0.1143) or 13 cents ($0.1315) depending on if you are buying or selling. These rates are the equivalent to stating that 1USD = 8.75 krona (1/11.43) or 1USD = 7.60 krona. (1/.1315)
Start with $100USD.
a. Exchange the $USD for Euros.
b. Exchange these Euros back for US$
c. With your remaining $, exchange for Brazilian Reals
d. Exchange the Reals back to USD. How much do you have left of the original $100?

15) Look at this chart above. You can read it this way: EUR/USD = “What is the value of one Euro, measured in USD?

Answer these questions:
a. Against the USD, is the EUR expected to get stronger or weaker by the end of 2018?
b. Against the Japanese Yen (JPY), is the Euro expected to get stronger or weaker?
c. Is the USD expected to increase or decrease in value vs the Australian Dollar (AUD)?
 
16) Your friend says he is going to Hong Kong, and is very excited because “the dollar is worth almost 8 times more in Hong Kong than the US” (1USD = 7.8 Hong Kong dollars). His vacation therefore should be “super cheap” and he is planning a major shopping spree. Why is he totally incorrect?

17) Your sister in law wants to invest his money in a bond in Russia, because the interest rate she can get is over 8% compared to 2% or less in the US.
What things does she need to worry about that might make her investment not as profitable as she hopes?

18) What probably happened that a government decided it needed to print the below banknote?

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