Finance 534 Week 11 Quiz 10
A finance quiz covering key concepts from Week 11, designed to test understanding of financial principles.
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Finance 534 week 11 quiz 10
Question 1
Suppose DeGraw Corporation, a U.S. exporter, sold a solar heating station to a Japanese
customer at a price of 143.5 million yen, when the exchange rate was 140 yen per dollar. In
order to close the sale, DeGraw agreed to make the bill payable in yen, thus agreeing to take
some exchange rate risk for the transaction. The terms were net 6 months. If the yen fell
against the dollar such that one dollar would buy 154.4 yen when the invoice was paid, what
dollar amount would DeGraw actually receive after it exchanged yen for U.S. dollars?
Correct Answer:
$929,404
Question 2
Suppose 144 yen could be purchased in the foreign exchange market for one U.S. dollar
today. If the yen depreciates by 8.0% tomorrow, how many yen could one U.S. dollar buy
tomorrow?
Correct Answer:
155.5 yen
Question 3
Suppose one British pound can purchase 1.82 U.S. dollars today in the foreign exchange
market, and currency forecasters predict that the U.S. dollar will depreciate by 12.0% against
the pound over the next 30 days. How many dollars will a pound buy in 30 days?
Answer
Correct Answer:
2.04
Question 4
Suppose 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 1.420
Swiss francs per dollar. Today, at maturity, the exchange rate is 1.324 Swiss francs per
Question 1
Suppose DeGraw Corporation, a U.S. exporter, sold a solar heating station to a Japanese
customer at a price of 143.5 million yen, when the exchange rate was 140 yen per dollar. In
order to close the sale, DeGraw agreed to make the bill payable in yen, thus agreeing to take
some exchange rate risk for the transaction. The terms were net 6 months. If the yen fell
against the dollar such that one dollar would buy 154.4 yen when the invoice was paid, what
dollar amount would DeGraw actually receive after it exchanged yen for U.S. dollars?
Correct Answer:
$929,404
Question 2
Suppose 144 yen could be purchased in the foreign exchange market for one U.S. dollar
today. If the yen depreciates by 8.0% tomorrow, how many yen could one U.S. dollar buy
tomorrow?
Correct Answer:
155.5 yen
Question 3
Suppose one British pound can purchase 1.82 U.S. dollars today in the foreign exchange
market, and currency forecasters predict that the U.S. dollar will depreciate by 12.0% against
the pound over the next 30 days. How many dollars will a pound buy in 30 days?
Answer
Correct Answer:
2.04
Question 4
Suppose 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 1.420
Swiss francs per dollar. Today, at maturity, the exchange rate is 1.324 Swiss francs per
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Document Details
University
Strayer University
Subject
Finance