Question
In: Finance
Identify two world currencies. To demonstrate variances in exchange rates, show the comparative value of the...
Identify two world currencies. To demonstrate variances in exchange rates, show the comparative value of the two currencies in 2000, 2010 and March 1, 2019 (value of one currency relative to the other). How have they changed over time? What are some reasons why?
*Please answer in DETAIL*
Solutions
Expert Solution
As per concept , an exchange rate is simply define as cost of one currency in terms of another currency. The relative value of one country's currency depend on many factors , some of them are :
- differential in inflation rate (purchase power)
- differential in interest rate
- amount of export and import and its differential between two countries
- government policy
- intervention from central bank
here, the exchange rate between INR and US$ has been used to explain the concept :
| Date | Exchange rate | Possible reason | |||||
| 1-Mar-00 | INR 43.625/US$ | ||||||
| 1-Mar-10 | INR 46.085/US$ | Differential in exchange rate from base level of 1st march 2000 is due to differential in Inflation rate between two countries , and export import gap between the countries | |||||
| 1-Mar-19 | INR 70.811/US$ | Differential in exchange rate from previous level of 1st march 2010 is mainly due to federal policy , interest rate changes,high level of inflow , differential in Inflation rate between two countries , and export import gap between the countries | |||||
jeff jeffy answered 1 year agoRelated Solutions
Identify two world currencies. To demonstrate variances in exchange rates, show the comparative value of the...
Identify two world currencies. To demonstrate variances in
exchange rates, show the comparative value of the two currencies in
2000, 2010 and March 1, 2019 (value of one currency relative to the
other). How have they changed over time? What are some reasons
why?
*Please answer in DETAIL*
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Most of the world has floating exchange rates, but the Euro Zone
combined the currencies of 17 countries to in effect, create a
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with the US dollar, and undervalues its exchange rate by 17% - 19%,
thus giving them an unfair advantage in international exchange.
Should the world governments get together and set up a common rule
for currency exchange? Discuss.
1-If two countries choose to fix the exchange rates among their currencies, then Select one: A....
1-If two countries choose to fix the exchange rates among their
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intervention. B. the country with a lower rate of inflation will
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1) A) Explain the six major factors of driving exchange rate
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3) A country’s real rate of return is 1.5% and expected
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Under fisher effect, what’s the nominal interest rate?
You have to estimate the expected exchange rates between your home currency and the other currencies...
You have to estimate the expected exchange rates between your
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Currency
Spot rate, as of 9/26
90-day Forward, as of 9/26
Euro (EUR)
$1.1468/EUR
$1.1454/EUR
Swiss Franc (SF)
SF 1.3425/$
SF 1.3395/$
Japanese Yen (JPY)
¥ 111.83/$
¥111.6615/$
British Pound (GBP)
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Hint: Use the following rules
Direct quotes:...
21-1 Assume the foreign exchange selling rates shown below for a few selected currencies US $...
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$1.4022
b-Indian Rupees
$0.0153
c-Japanese Yen
$0.0094
d-Australian Dollars
$0.7716
e-Mexican Pesos
$0.0538
f-Israeli Shekels
$0.2878
Calculate the number of the following foreign currencies
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a-British Pounds
b-Indian
Rupees
c-Japanese Yen
d-Australian Dollars
e-Mexican Pesos
f-Israeli Shekels
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