Question

In: Accounting

4. If your company hold these 4 positions until 2011-01-01 CAD               1,000,000 JPY          100,000,000...

4. If your company hold these 4 positions until 2011-01-01

CAD               1,000,000
JPY          100,000,000
MXN               5,000,000
THB          100,000,000
DATE CAD1 JPY1 MXN1 THB1 SLR1 EUR1 CNY1 GBP1 INR1 SGD1
2011-01-01 0.9939 0.0121 0.0825 0.0327 0.0090 1.3371 0.1516 1.5782 0.0220 0.7774

Solutions

Expert Solution

There are Two Types of Quotation in FOreifn Exchange Market:

1. American Quotation : Number of US Dollar Per Unit of a Foreign Currency (Or say Direct Quote)

USD / Per CAD , USD / per THB

2. European Quotation : Number of Units of Foreign Currenct per US Dollar (Or say Indirect Quote)

CAD / Per USD , THB / Per USD

Conversion of Foreign Currency in US Dollar (The Position may be either Payable or Receivable)

1.

Units of CAD                         1,000,000
Type of Quote Indirect Quote
Rate of Exchange 0.9939 CAD / Per USD
Units of USD $               1,006,137.44

Units of USD : Units of CAD / Rate of Exchange
1,000,000 / 0.9939
$ 1,006.137.44

2.

Units of JPY                 100,000,000
Type of Quote Direct Quote
Rate of Exchange 0.0121 USD / Per JPY
Units of USD $                  1,210,000


Units of USD : Units of JPY / Rate of Exchange
100,000,000* 0.0121
$ 1,210,000

3.

Units of MXN                         5,000,000
Type of Quote Direct Quote
Rate of Exchange 0.0825 USD / Per MXN
Units of USD $                        412,500

Units of USD : Units of MXN / Rate of Exchange
5,000,000* 0.0825
$ 412,500

4.

Units of THB                    100,000,000
Type of Quote Direct Quote
Rate of Exchange 0.0327 USD / Per THB
Units of USD $                     3,270,000

Units of USD : Units of THB / Rate of Exchange
100,000,000* 0.0327
$ 3,270,000

ekkarill92 answered 2 years ago
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