International Finance

Chapter 3--Practice Problems

1. Do the Internet/Excel Exercises on page 93 of the book, but use this website instead of the
yahoo site: https://www.oanda.com/currency/live-exchange-rates/

For those below…use the OANDA rates

2. What is the equivalent U.S. dollar price of the following?

a. A 25 British Pound bottle of Scotch.
b. A 40 Euro bottle of Irish whiskey.
c. A 3000 Malaysian Ringgit Computer.
d. A 150 Russian Ruble bottle of Vodka.
e. A 18,000 Chilean Peso bottle of wine

3. If a personalized Louisville Slugger bat costs $125 (US), what is the equivalent foreign
exchange price in
a. Turkish Lira?
b. Euros?
c. Hong Kong Dollars?
d. Chinese Renminbi (Yuan)?
e. Egyptian Pounds?

4. Calculate the foreign exchange price of a 160 Mexican Peso bottle of tequila in terms of

a. British Pounds.
b. Peruvian New Sol.
c. Thai Baht.
d. Israeli Shekels.
e. New Zealand Dollars.

5. Calculate the foreign exchange equivalent price of a 1000 Maltese lira Falcon statuette in
terms of
a. Philippines Pesos.
b. Bahrainian Dinars.
c. Brazilian Real.
d. Indonesian Rupiah.
e. Indian Rupees

6. Consider a $50 Timex watch and an 11,000 Swiss Franc Rolex.

a. Calculate the current price of each of these products in the other country’s currency.
b. Find the relevant exchange rate on July 1, 2018. What was it? What was your source?
c. How would you describe the change in the exchange rate for Swiss Francs and US $ since
July 1?
d. Calculate what the price was for each of these products in the other country’s currency
using the previous rates.
e. Explain how your answer to part c could have helped you predict how the prices of the
watches would change.

For additional practice (if it isn’t coming naturally yet)…add additional currencies to #2, #4, and
#5 and/or repeat #6 for the products from #2-#5.