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# Exchange rates

Please find the information in the attachment. Show all formulas and calculations and send in a word or excel document.

17-1. (Spot exchange rates)
An American business needs to pay (a) 10,000 Canadian dollars, (b) 2 million yen, and (c) 50,000 Swiss francs to businesses abroad. What are the dollar payments to the respective countries?
17-2. (Spot exchange rates)
An American business pays \$10,000, \$15,000, and \$20,000 to suppliers in, respectively, Japan, Switzerland, and Canada. How much, in local currencies, do the suppliers receive?
17-3. (Indirect quotes)
Compute the indirect quote for the spot and forward Canadian dollar, yen, and Swiss franc contracts.
17-4. (Exchange rates)
The spreads on the contracts as a percentage of the asked rates are 2 percent for yen, 3 percent for Canadian dollars, and 5 percent for Swiss francs. Show, in a table similar to the preceding one, the bid rates for the different spot and forward rates.
17-5. (Exchange rate arbitrage)
You own \$10,000. The dollar rate in Tokyo is 216.6743. The yen rate in New York is given in the preceding table. Are arbitrage profits possible? Set up an arbitrage scheme with your capital. What is the gain (loss) in dollars?
17-6. (Cross rates)
Compute the Canadian dollar/yen and the yen/Swiss franc spot rate from the data in the preceding table.

#### Solution Summary

The solution explains various questions relating to exchange rates

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