Suppose your company imports computer motherboards from Singapore. The exchange rate is currently 1.5122 S$/US$. You have just placed an order for 23,000 motherboards at a cost to you of 231.55 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $161 each.

Calculate your profit if the exchange rates stay the same over the next 90 days. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Profit            $  

Calculate your profit if the exchange rate rises by 11 percent over the next 90 days. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Profit            $

Calculate your profit if the exchange rate falls by 11 percent over the next 90 days. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Profit            $

What is the break-even exchange rate? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.)

Break-even exchange rate            S$  /$

What percentage decrease does this represent in terms of the Singapore dollar versus the U.S. dollar? (Enter your answer as a positive value. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Percentage decrease             %

2. Suppose the spot and three-month forward rates for the yen are ¥102.22 and ¥101.17, respectively.

a. Is the yen expected to get stronger or weaker?

(Click to select) WeakerStronger

b. What would you estimate is the difference between the inflation rates of the United States and Japan? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16)

Difference between the inflation rates             %