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5 Foreign Exchange. You just came back from Canada, where the
Canadian dollar was worth $.70. You still have C$200 from your trip and
could exchange them for dollars at the airport, but the airport foreign
exchange desk will only buy them for $.60. Next week, you will be going
to Mexico and will need pesos. The airport foreign exchange desk will sell
you pesos for $.10 per peso. You met a tourist at the airport who is from
Mexico and is on his way to Canada. He is willing to buy your C$200 for
130 pesos. Should you accept the offer or cash the Canadian dollars in at
7 Eurocredit Loans.
a. With regard to Eurocredit loans, who are the borrowers?
loans?
peso retail transactions in which the ask rate is $.11 and the bid rate is
$.10.
1 International Markets. What is the function of the international money
3 market? Briefly describe the reasons for the development and growth of
the European money market. Explain how the international money, credit,
4 the Japanese yen against the U.S. dollar would affect the return to a U.S.
firm that borrowed Japanese yen and used the proceeds for a U.S. project.
1 Motives for Providing Credit in Foreign Markets. Explain why some
2 interest rates normally similar for those European countries that use the
euro as their currency? Offer a reason why the government interest rate
interest rate of another country, even though the euro is the currency
3 retail outlets in the city of Shanzen, China, which has a population of 3.7
million. These outlets are massive and contain products purchased locally
in Shanzen, it may remit those earnings back to the United States. Wal-
in foreign exchange.