International Finance , two questions need answer for those two questions less than 4 hours from now, Q1 The exchange rate quotations are as follows on S
International Finance , two questions need answer for those two questions less than 4 hours from now,
Q1
The exchange rate quotations are as follows on September 22, 2011:
$1 = 13.8791 Mexican pesos
1 Mexican peso = 0.0535 Euros
You are planning to study abroad in Italy next Spring and need to purchase 10,000 Euros with U.S. dollars. How many U.S. dollars will you need for your stay in Italy?
Q 2
Baylor Bank believes the New Zealand dollar will appreciate over the next five days from $.78 to $.80. The following annual interest rates apply:
Currency Lending Rate Borrowing Rate
Dollars 7.10% 7.50%
New Zealand dollar (NZ$) 6.80% 7.25%
Baylor Bank has the capacity to borrow $5 million. If Baylor Bank’s forecast is correct, what will its dollar profit be from speculation over the five‑day period?
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Be sure to provide explanations to short essay questions and show your work for calculations. Simple answers like “go up” or “go down” only earn you partial credit.
