Gce Model Questions Vol1 2024 Commerce Question 5
Practice objective / multiple choice question 5 from the 2024 Gce Model Questions Vol1 Commerce examination.
An importer in the UK must pay a US supplier \(\$12\,000\) for goods. The bank offers two ways to obtain the pounds needed: - **Spot transaction**: exchange rate \(\£0.78\) per \(\$1\), a commission of 0.5 % on the dollar amount, and a flat fee of \(\£30\). - **Forward contract**: exchange rate \(\£0.80\) per \(\$1\), no commission, but a flat fee of \(\£20\). The importer expects to sell the goods in the UK for \(\£10\,500\). Which option gives the higher profit, and what is that profit (to two decimal places)? Show all reasoning steps.
Answer Options
About This Question
This is Gce Model Questions Vol1 2024 Commerce Question 5. It is one of the objective questions from the 2024 Gce Model Questions Vol1 Commerce examination.
Difficulty level: Medium .
Master the Exam!
You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.