Asked by Courtney Cridland on Jun 19, 2024
Verified
If a U.S.importer has to write a $200 check to cover a 20,000 yen purchase from Japan,the exchange rate is
A) 200 yen to a dollar.
B) 100 yen to a dollar.
C) 20 yen to a dollar.
D) 10 yen to a dollar.
E) 200 dollars to a yen.
Importer
An individual or organization that buys goods from other countries for resale or use in the domestic market.
Yen Purchase
The act of buying yen, Japan's currency, which can involve exchanging another currency for yen in foreign exchange markets.
Exchange Rate
The value of one currency for the purpose of conversion to another, indicating how much of one currency can be exchanged for another currency.
- Understand the rationale behind foreign exchange rates and the steps for determining the value of one currency versus another.
Verified Answer
MS
Miranda ShaverJun 22, 2024
Final Answer :
B
Explanation :
To convert yen to dollars, we need to divide yen by the exchange rate. Therefore, 20,000 yen divided by the unknown exchange rate equals $200. Solving for the exchange rate, we get: 20,000 yen ÷ x = $200. Rearranging the equation, we get: x = 20,000 yen ÷ $200 = 100 yen to a dollar. Therefore, the correct answer is B.
Learning Objectives
- Understand the rationale behind foreign exchange rates and the steps for determining the value of one currency versus another.