The Figure Given Below Depicts the Foreign Exchange Market for British

question 41

Multiple Choice

The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.Figure 22.2

-Suppose a U.S. importer agrees to pay a Japanese firm 55,000 yen for a shipment of goods. If the agreement is made when the exchange rate is $1 = ¥100, what is the change in the dollar value of the goods if the exchange rate changes to $1 = ¥110, on the payment-due date?

• A)-$50
• B)$550,000
• C)-$550,000
• D)$50
• E)-$55,000

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Definitions:

Point-Of-Sale

The location or system where a retail transaction is completed, such as cash registers or online checkout pages.

Debit Card

A payment card that deducts money directly from a consumer's checking account to pay for a purchase.

Hedge Fund

A Hedge Fund is a private investment fund that uses complex strategies in both domestic and international markets with the goal of generating high returns.

Nondepository Financial Institution

Financial entities that do not accept traditional deposits like a bank, but may offer other financial services such as investment, insurance, and retirement plans.