Suppose it is May 1985 and the current value of the Greek drachma is Dr 1 = $0.006369,but the expected spot rate 90 days hence is Dr 1 = $0.005980.What is the value of a sales order of Dr 50 million sold on 90-day terms?
A)$318,450
B)$562,491
C)$299,000
D)5,430

Question

Quizplus · Accepted Answer

The expected spot rate in 90 days is $0.005980 per drachma. Therefore, the value of Dr 50 million is 50,000,000 * 0.005980 = $299,000.

Suppose It Is May 1985 and the Current Value of the Greek