Assignment #2 — 50 Points– In this assignment, you will need to convert currencies using either a cross table or individual exchange rate quotes. You should have reviewed the additional Foreign Exchange Market PowerPoint slides and you should have practiced doing some conversions.

Please print this assignment and work your solutions in pen or pencil. You may want to print two sets so you can upload the cleanest copy you can to be graded. Please mark your answers well and don’t forget to use units (i.e. “dollars”, “GBP”, “Euros”, etc…). Round your final answer to two decimals.

Part 1 Use the following cross table to answer the first twelve questions (2 points each). The rates correspond to US Dollar, Euros, Japanese Yen, British Pound, Swiss Franc, Canadian Dollar, Australian Dollar. Remember to read the table first across, then down the table. For example, 1 EUR is equal to 1.4905 AUD; or the inverse being 1 AUD is equal to 0.6709 EUR.

1. Of the currencies listed, which one is strongest against the British Pound? Explain your answer.

2. The cross table shows the inverse of each exchange rate quote. If 1 USD is equal to 1.2591 CAD, what is the inverse of that? Show your work and explain what it means.

3. T-Rex Company based in the U.S. usually buys raw materials from an Australian supplier. How much would the order be in U.S. dollars if the invoice is for $15,450.00 AUD?


4. T-Rex Company is looking for alternative suppliers in Japan. The supplier’s quote is for 1,355,190 JPY. What would this be in U.S. dollars? Which supplier should T-Rex buy from, the Australian or Japanese?

RF Industries is a U.S. company doing business around the world. At the end of the first quarter (March 31st) it decides to bring back home the profits from three of its subsidiaries in Switzerland, England and Canada. How much revenue does RF Industries have in U.S. dollars given the following figures? (hint: convert each one and then add them up)

5. Switzerland: 24,860 CHF

6. England: 32,790 GBP

7. Canada: 25,588 CAD

8. Total Profit in USD:

Marie Josee makes famous custom shirts that are sold all over the world from Canada. She wants to make sure her revenue (sales price) for the shirts is equivalent to $45 CAD in every country. What should be the sales price for the shirts in the following countries? (hint: convert to the local currency!)

9. European Union

10. Japan

11. Australia

12. Without considering any other costs (shipping, taxes, tariffs, etc…), which country would it be the best market for Mariee Josee’s shirts? Which one gives her the most revenue? Explain your answer to receive credit.



A Mexican company manufactures televisions sets by importing materials into the country and then exporting the finished product to the United States. The cost per unit in Mexican Pesos of the components and materials needed for the TV are as follows:

a) Microchips from China: 5,300 MXN (Mexican Pesos) b) Screen from Northern Mexico: 2,730 MXN c) Plastics from India: 3,565 MXN d) Electronics from U.S.: 2,342 MXN

13. What is the total cost of the television set in U.S. dollars if labor cost per unit (per TV) is 1,599

MXN? The exchange rate is 20.37 MXN per USD.

14. What should be the Sales price in USD if the company wants to have a 26% gross margin?

15. What should be the Sales Price for the same TV if sold in Brazil? The desired gross margin in the Brazilian Market is 20%. The exchange rate is R$0.32 (BRL Brazilian Real) per Mexican Peso.

16. If the same Mexican manufacturer finds a new supplier for Microchips coming from Japan at a

cost per unit of 25,255.57 JPY, and the exchange rate is 5.87 JPN per MXN, what is the difference in price in Mexican Pesos for the microchips from the new supplier?


You are ready to take a vacation abroad! You decide you are going to England. You need to make a few decisions before you go, and some while over there:

17. Should you use your credit card to pay for your expenses while in London (your bank’s exchange rate is 0.65 GBP per USD) or should you exchange money at home at a rate of 0.75 GBP per USD? Explain your answer.

18. Your vacation package gives you the option to pre-pay now or pay once you get there. The US dollar’s value is expected to decrease/depreciate in the near future. Should you pre-pay or pay later? What would be a better deal? Explain your answer.

19. You are looking to stay at a nice hotel at a nightly rate of 150 GBP. What is the cost of the hotel in USD if the exchange rate at that time is 1.45 USD per GBP?

20. You are done with you vacation and you are about to go back to the U.S. Where should you exchange your GBP back to USD; at the hotel at 0.80 GBP per USD or at the local bank for 0.72 GBP per USD?

Answer the following question (2 points)

The local exchange house in Argentina has two quotes on the window for USD:

Buy: 108.95 Sell: 109.95

21. How many Argentinian Pesos will you get if you go to exchange $400 USD?

  • Part 1
  • Part 2

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