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washi sept 2018

Aannette7y ago
hi why have we chosen the rate 0.7000 in converting cashflows from ard to jpy. why not 0.74000?
Aannette7y ago#1
Sir?
John MoffatJohn MoffatTutor7y ago#2
They need to buy ARD for the investment and therefore to convert to JPY we divide by the lower rate (dividing by a higher rate would give a lower cost which cannot be the case!). I explain how to decide which rate to use in the first of my free lectures on foreign exchange risk management.
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