Chamberlain Canadian Imports has agreed to purchase 15,000 cases of Canadian beer for 4 million Canadian dollars at today’s spot rate. noted the following current spot and forward rates:
U.S. Dollar/Canadian Dollar Canadian Dollar/U.S. Dollar
Spot 0.6930 1.4430
30-day forward 0.6935 1.4420
90-day forward 0.6944 1.4401
180-day forward 0.6957 1.4374
On the same day, Churchill agrees to purchase 15,000 more cases of beer in 3 months at the same price of 4 million Canadian dollars.
a. What is the price of the beer, in U.S. dollars, if it is purchased at today’s spot rate?
b. What is the cost, in U.S. dollars, of the second 15,000 cases if payment is made in 90 days and the spot rate at that time equals today’s 90-day forward rate?
c. If the exchange rate for the Canadian dollar is 1.20 to $1 in 90 days, how much will Churchill have to pay for the beer (in U.S. dollars)
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more