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3. (20 points) You are traveling internationally for business. Here is a list of your expenses. Note that the expenses are in the local currencies: Euros (EUR), Indian Rupees (INR), and Chinese Yuan (CNY). Stop 1: Frankfurt, Germany EUR Currency Stop 2: Mumbal, India INR Stop 3: Beijing, China CNY Lodging Food Misc. 455.75 615.90 195.00 18,750.00 9,606.83 5,230.00 4,320.72 2,009.50 1,730.00 The exchange rates at the time of your trip were as follows. Note that USD means U.S. Dollars. change rate 1741235 USD/EUR 62.57822 USD/INR 6.108735 USD/CNY 4. (20 points) The exchange rates shown in 3. are the rates available to your company because it exchanges large amounts of currency. If you went to a bank or an exchange counter at a hotel or an airport, the rates for you would be less favorable. a. If the rate at which you can exchange EUR for USD is 10% worse than the rate shown in 3 (i.e., EUR is 10% weaker relative to USD), how many USD can you get for 1 EUR? USD/EUR b. If the rate at which you can exchange INR for USD is 15% worse than the rate shown in 3 (i.e., INR is 15% weaker relative to USD), how many USD can you get for 1 INR? USD/INR C. If you change money at a tourist location, like an exchange counter at an airport, you may see "service charges" in addition to unfavorable rates. Say, on your trip, you decide to change some money at the Mumbai Airport. You want to change the 325 EUR you still have in your pocket to INR. i. Based on the exchange rates given in 3, how many INR could you get for 325 EUR? I ii. The exchange from part (1) reflects what rate? INR/EUR ili. If, however, the INR/EUR exchange rate at the airport is 17% worse than the rate you calculated in part b, how many INR could you get for 325 EUR? iv. Now assume that in addition to the "worse" rate from part (ili), there is a 100 INR service charge. How many INR will you be left with after you exchange your 325 EUR? 1. The net exchange from (iv) is equivalent to what rate? INR/EUR V. The rate calculated in part (iv) is what percent worse than the rate in part (11)? 3

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