The answer is f.Both b and C are true
Pound has appreciated as it can buy more dollars now, which also reflects depreciation of dollars
1B. % change = (1.9596-1.7188)/1.7188
= 13.95%
i.e. b
1A. Suppose the exchange rate for the British pound was $1.7188/£ one year ago. The current...
3. Suppose that one-year interest rate is 12% for the British pound and 9% for the U.S. dollar. (a) If the current exchange rate St = $1.63/£, what is the expected future exchange rate in one year? (5 marks) (b) Suppose a change in expectations regarding future U.S. inflation rate causes the expected future spot rate to decline to $1.52=£. By how much would the U.S. interest rate change? (5 marks)
1. Exchange Rate: Suppose the direct foreign exchange rates in U.S. dollars are: 1 British pound = $1.60 1 Canadian dollar = $0.74 Required: a. What are the indirect exchange rates for the British pound and the Canadian dollar? b. How many pound must a British company pay to buy goods costing $8,000 from the U.S. company? c. How many U.S. dollars must be paid for a purchase costing 4,000 Canadian dollars? 2. Changes in Exchange Rates: Upon arrival at...
Tuesday Feb 18 Que Name Problem Set 7 Econ 2301 1. If the exchange rate between the U.S. and Mexico (let's look at price of one dollar in Mexican pesos) changes from 12 pesos - $1 to 18 pesos = $1 (as happened between about 2013 and spring 2016, a. the dollar has appreciated in value b. the peso has deprecated in value c. the dollar has depreciated in value d. the peso has appreciated in value e. a and...
5A. Suppose the current spot rate for the UK pound is $1.9586/£. The annual inflation rates in the US and in the UK are expected to be 2% and 5%, respectively. This means that: a. The U.S. dollar should appreciate over the next year. b. The U.S. dollar should depreciate over the next year. c. Both a and b are true. d. Neither a nor b are true. 5B. Using the information provided in question 5A, what is your best...
Calculate Percent Change Assume the the British Pound U.S. Dollar exchange rate changes from £1.6566/$ to £1.8522/$ What is the percentage change of the U.S. Dollar? O A. +10.56% OB. -11,81% O C. +11.81% D. -10.56% O E. None of answers is correct
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The one-year forward rate of the British pound is $1.3985, while the current spot rate is $1.2239. Based on the forward rate, what is the expected percentage change in the British pound over the next year? Round to four decimals. Example: 0.1234
1a) Suppose the 1-year effective annual interest rate is 4.9% and the 2-year effective rate is 6.5%. Compute the fixed rate in a 2-year amortizing interest rate swap based on $460,000 of notional principal in the first year and $390,000 in the second year. Answers: a. 5.67% b. 6.62% c. 6.32% d. 5.60% e. 6.45% 1b) Suppose that 1-year, 2-year, and 3-year forward prices for the British pound are $1.76/£, $1.67/£, and $1.37/£, respectively. The 1-year, 2-year, and 3-year effective...
We noted that in 1900, the fixed exchange rate between the British pound and the U.S. dollar was £1 equals $5. What is the exchange rate today? Whose currency has gained the most in purchasing power? What caused this dramatic change in the exchange rate?
A change in the Australian dollar value of the British pound from $2.60 to $2.50 means: Select one: a. there has been an increase in the pound price of British goods b. an increase in the dollar price of British goods c. the pound has appreciated relative to the Australian dollar d. the Australian dollar has appreciated relative to the pound