Suppose a bank customer with Euro 1,000 wishes to trade out of euro and into Japanese...

Suppose a bank customer with Euro 1,000 wishes to trade out of euro and into Japanese yen. The dollar-euro exchange rate is quoted as $1.60 = Euro1.00 and the dollar-yen exchange rate is quoted at $1.00 = ¥120. How many yen will the customer get?

Expert Solution

First we have to compute the Euro into USD

Euro to USD rate =	1.6

Therefore 1000 Euro =	$ 1,600.00
1000*1.6

now, we can convert the USD into Yen

USD to Yen =		¥ 120.00

Therefore, 1600 USD =	¥ 192,000
1600*120

ans =		¥ 192,000

jeff jeffy answered 2 years ago

1. Suppose the exchange rate between US$ and Euro, US$ and Japanese Yen are: 1...

1. Suppose the exchange rate between US$ and Euro, US$ and Japanese Yen are: 1 US$ = 2 Euro; 1 US$ = 100 Yen. Suppose the interest rates published by central banks in the U.S., Euro zone, and Japan are 2%, 3%, and 4%, respectively; And, suppose the inflation rates in the U.S., Eurozone, and Japan are 1%, 2%, and 1%, respectively. Therefore, (calculation formula is optional) Q1.1: How much Yen can 1 Euro exchange for?...

Suppose you get the following quotes from Bank A and B on Euro. Bank...

Suppose you get the following quotes from Bank A and B on Euro. Bank A Bid Ask Bank B Bid Ask USD1.2610/EU USD1.2630/EUR USD1.2640/EUR USD1.2660/EUR You realize that you can use local arbitrage to take advantage of the quotes difference. If you could put as much as $1 million into the arbitrage, how much would be your arbitrage profits? To get full credits, you need to include step by step instructions on how to carry out this strategy.

4. Suppose that Denmark has a large trade surplus with the countries in the Euro Area....

4. Suppose that Denmark has a large trade surplus with the countries in the Euro Area. Suppose that Denmark takes some steps to allow its currency to appreciate respect to the Euro. What do you expect to happen to the trade balance of Denmark with the Euro countries? The answer should be based on the J-curve. (a) The trade surplus increases (becomes larger) in both the short run and in the long run. (b) The trade surplus increases (becomes larger)...

Consider an automatic bank machine, known as Automatic Teller Machine (ATM), and a customer who wishes...

Consider an automatic bank machine, known as Automatic Teller Machine (ATM), and a customer who wishes to withdraw some cash from his or her banking account. Draw a UML system sequence diagram to represent this use case.

An American bank expects the euro to depreciate from its present level of $1.35/euro to $1.25/euro...

An American bank expects the euro to depreciate from its present level of $1.35/euro to $1.25/euro in 60 days. They intend to borrow 20 million euros at a rate of 6.5% annually and they can lend in the U.S. at 6% annually. Don’t worry about compounding of the interest rate. What is their total profit/loss from this transaction? Show your work and the flow of funds for full credit. Borrow 20M euro’s at $1.35/euro Holds $27M (20,000,000 X 1.35) Lends...

1. What are the efficiencies on Japanese firm with using Japanese main bank system, and the...

1. What are the efficiencies on Japanese firm with using Japanese main bank system, and the effects of their economy after 1950s? 2. What are the main difference between AIIB, ADB and World Bank. According to the Infrastructure development in Asia, do you think AIIB can be a main competitor to the ADB and World Bank? Explain it with various data.

Suppose we live in an economy with just one bank. Mary is the first customer of...

Suppose we live in an economy with just one bank. Mary is the first customer of the bank and makes a deposit of $500. The required reserve ratio is 10%. (Show Work) (a) What is the excess reserve amount? With this amount of excess reserve, is the bank allowed to make any loans? (b) What is the maximum amount of loan that the bank can make if the borrower does not withdraw the money. (c) What is the maximum amount...

A product sells for $1,000 in the U.S. If the exchange rate between $ and euro...

A product sells for $1,000 in the U.S. If the exchange rate between $ and euro is $1 = 0.90 euro, and if PP holds, what would be the price of the same product in Europe?

Choose one major global currency among the euro, the Japanese yen, the British pound, the Chinese...

Choose one major global currency among the euro, the Japanese yen, the British pound, the Chinese yuan, the Canadian dollar, the Australian dollar, the Mexican peso and the Swiss franc and explain the economic factors that have affected its price in US dollars during the past 3 months.

Answer the following questions below: 1. If you sell widgets and a Japanese firm wishes to...

Answer the following questions below: 1. If you sell widgets and a Japanese firm wishes to buy your product, what terms should your contract contain? 2. How might negotiating a sales contract with a Chinese supplier differ from dealing with a German supplier of materials? 3. Does the CISG provide adequate protection to U.S. exporters in their dealings with buyers in developing economies? 4. Do the practices outlined in Chapter 5 concerning the documentary sale provide adequate protection to U.S....

Question