Question 1. You are assigned the duty of ensuring the availability of 100,000 yen for the payment that is scheduled for the next month. Considering that your company possesses only U.S. dollars, identify the spot and forward exchange rates. What are the factors that affect your decision of utilizing spot versus forward exchange rates? Which one would you choose? How many dollars do you have to spend to acquire the amount of yen required?
Question 2. As an entrepreneur, you are interested in expanding your business to either Poland or Portugal. As part of your initial analysis, you would like to know how much investment is needed to go to these markets. In order to get a rough number, you hire a consulting firm to do initial investment analysis. The consulting firm provides you a short report about how much money is needed for both countries. The number provided is: one million zloty (Poland's currency) and 45 million escudo (Portugal's currency) to make a clear comparison, you need to convert these currencies to U.S. dollars. Do the conversion and suggest where to invest.