Reference no: EM132559817

Exhibit 1 shows the exchange rate values of several major world currencies relative to the U.S dollar as they were on November 24,2011. The first column shows the number of units of the foreign currency that could be obtain by trading in one U.S dollar. The second column show the number of U.S dollars that could be obtained by trading in one unit of the foreign currency. (Note: These are simply the reciprocals of the data in the first column.)

EXHIBIT 1

FOREIGN CURRENCY UNIT OF THE FOREIGN CURRENCY U.S DOLLARS PER UNIT PER U.S DOLLAR OF FOREIGN CURRENCY

English pound 0.644 1.5539
European euro 0.748 1.3373
Canadian dollar 1.044 0.4577
Mexican peso 14.077 0.071
Japanese yen 77.073 0.013

b. If a U.S citizen wishes to purchase a bottle of French wine costing 80 euros, how much would it cost in U.S. dollars?

c. If a Canadian citizen wished to purchase a Japanese automobile costing 2,500,000 Japanese yen. How much would it cost in Canadian dollars? (Hint: With the data given, you must first convert from Japanese yen to U.S dollars, then convert U.S dollars to Canadian dollars.)