Assume an FI Sells A$100 Million for US$ on the Spot

Multiple Choice

Assume an FI sells A$100 million for US$ on the spot currency markets at an exchange rate of A$1.20 to $US1.00. What is the US$ value of the investment (round to two decimals) ?

A) $100 million $\times$ $1.2 = US$120 000.00 million
B) $100 million / $1.2 = US$83 333.33 million
C) $100 million / ($1.2 - US$1.0) = US$500 000.00 million
D) $100 million $\times$ ($1.2 - US$1.0) = US$20 000.00 million