TOPIC 4 THE FINANCIAL ENVIRONMENT OF INTERNATIONAL BUSINESS  103

An exchange rate is the rate at which one currency is converted into another
currency. We can look at exchange rate as being the price of foreign
exchange, just like the price of other commodities. As examples, Table 4.1
shows some foreign exchange rates quoted against the US dollar (USD).

Table 4.1: Currency Exchange Rates (October 17, 2016)

Country USD Equivalent Currency Per USD

Argentina (Peso) 0.06594 15.1650
Australia (Dollar) 0.75986 1.3160
Brazil (Real) 0.31208 3.2043
Britain (Pound) 1.2162 0.8222
Canada (Dollar) 0.7599 1.3160
China (Yuan) 0.1485 6.7336
France (Euro) 1.0981 0.9107
Hong Kong (Dollar) 0.1289 7.7592
India (Rupee) 0.01497 66.8042
Japan (Yen) 0.0096 104.220
Korea (Won) 0.00088 1,141.80
Mexico (Peso) 0.00527 18.9890
Russia (Rouble) 0.01587 62.9959
Sweden (Krona) 0.11315 8.8380
Switzerland (Franc) 1.01089 0.9892

Source: www.xe.com

ACTIVITY 4.6

Using the rates provided in Table 4.1, calculate how much of each foreign
currency is required to purchase USD100,000.00.

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