Homework Answers
Answer is depreciating
because in the Jan 2009 exchange rate was can$ 1 = 1.3 US$ while rate has changed to can$ 1 = US$ .8 which means dollar is appreciating and Canadian dollar is depreciating because less US dollars are available in a 1 Canadian dollar
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Question 2 1 pts In January 2009, the exchange rate between USD and CAD is about...
If the exchange rate between the USD and CAD is 1 USD = 1.35 CAD, then...
If the exchange rate between the USD and CAD is 1 USD = 1.35 CAD, then it changes to 1 USD = 1.20 CAD. Then the US Dollar has appreciated against the Canadian Dollar currency. True or False and why: If I received a pay raise for the last three years, then it means that I am doing better and have a better quality of life." True or false and why: If the CPl in 2018 is 250 and the...
5. Suppose that a researcher approximates the density of the CAD/USD exchange rate in January 2018...
5. Suppose that a researcher approximates the density of the CAD/USD exchange rate in January 2018 by ~N(0.75,0.024) (so the mean is 0.75 and the standard deviation is 0.024, measured in US dollars). (a) Find the probability of observing an exchange rate less than 0.762. (b) Find the probability of observing an exchange rate between 0.75 and 0.78 (c) Find a value m such that 0.75 + m > z > 0.75-rn 95% of the time. (d) Find a value...
The graph below shows the exchange rate between South African Rand (abbreviated ZAR) and United States...
The graph below shows the exchange rate between South African
Rand (abbreviated ZAR) and United States Dollars (USD), as
ZAR/USD.
From 1990 to 2000, was the rand appreciating against the dollar
or depreciating? Explain.
How many rand could 100 US dollars have been exchanged for in
2004, when the exchange rate was (approximately) 6 ZAR/USD?
How many US Dollars could 500 rand have been exchanged for in
2014, when the exchange rate was (approximately) 10 ZAR/USD?
13 12 6 4...
QUESTION 18 The USD/CAD spot rate is USD 0.7500 - USD 0.7505. The 6-month forward points...
QUESTION 18 The USD/CAD spot rate is USD 0.7500 - USD 0.7505. The 6-month forward points are 10-20. What is the outright 6-month forward quotation? 0 USD 0.7510 - USD 0.7520 0 USD 0.7490 - USD 0.7485 0 USD 0.7510 - USD 0.7525 None of the answers is correct. QUESTION 19 Assume you are a French investor. You see that stock for British Airways has a bid price of EUR 36 and an ask price of EUR 36.5 on the...
3. You are given the following exchange rates: Exchange Rates Time 0 Time 1 So Si...
3. You are given the following exchange rates: Exchange Rates Time 0 Time 1 So Si USD / GBP 1.8558 1.8561 USD/EUR 1.2674 1.2622 CAD / USD 1.3111 1.3129 MXN / USD 10.7575 10.6780 AUD/USD 1.3095 1.3025 ZAR / USD 6.8330 6.8850 Where: GBP = British Pound: CAD Canadian Dollar; MXN - Mexican Peso; AUD = Australian Dollar; ZAR = South African Rand Using the information above: a. Which foreign currencies are directly quoted? b. Which foreign currencies are indirectly...
Question 2 (a) Explain the difference between nominal exchange rate and real exchange rate (6) As mentioned in clas...
Question 2 (a) Explain the difference between nominal exchange rate and real exchange rate (6) As mentioned in class, the Big Mac Index is a numerical tool for assessing disparities in consumer purchasing power between countries. Suppose that the Big Mac costs 7.50 Canadian dollars in Canada and 5.50 US dollars in the US. Suppose that the nominal exchange rate is 1.2 Canadian dollars to 1 US dollar. (i) Calculate the real exchange rate. (ii) Is the Canadian dollar undervalued...
If we know the exchange rate between Country A's currency and Country B's currency and we...
If we know the exchange rate between Country A's currency and Country B's currency and we know the exchange rate between Country B's currency and Country C's currency, then we can compute the exchange rate between Country A's currency and Country C's currency. a. Suppose the exchange rate between the Japanese yen and the Canadian dollar is currently ¥106 = $1 and the exchange rate between the British pound and the Canadian dollar is £0.66 = $1. b. Suppose the...
1) An American investor holds a CAD$ Guaranteed Investment Certificate (GIC) which will mature on March...
1) An American investor holds a CAD$ Guaranteed Investment Certificate (GIC) which will mature on March 10, 2021 at a value of CAD $205,000. He intends to cash in the GIC at that time because the bill for his house renovation comes due on March 30, 2021. He is afraid that the USD/CAD exchange rate may change unfavourably between now and then and wants to fix the rate at which he can covert the CAD$ GIC proceeds into $US. He...
1. The US retail sales amounted to $4.31 billion in 2012. What did retailers sell in 2018 if the ...
1. The US retail sales amounted to $4.31 billion in 2012. What did retailers sell in 2018 if the average annual rise in sales was 2.58%? (.5 points) 2. The European money supply M1 rose from 1,982 billion euros in January 2000 to 8,293 billion euros in January 2019. What was the average growth rate in that 19-year period (compounded annually)? (1.5 points) 3. In January 2002 the Russian unemployment was 6.74 million persons, and in January 2019 it was...
This question is related to Foreign exchange and international finance. Thanks, and definite thumbs up for...
This question is related to Foreign exchange and
international finance. Thanks, and definite thumbs up for
answers!
2 pts )\Question 29 Questions 23-36 are based on the following information: Transaction Exposure Problem: (34 points in total) Suppose that you (i.e., company XYZ) are a US-based importer of goods from Canada. You expect the value of the Canada to increase against the US dollar over the next 6 months. You will be making payment on a shipment of imported goods (CAD100,000)...
5. Suppose that a researcher approximates the density of the CAD/USD exchange rate in January 2018 by ~N(0.75,0.024) (so the mean is 0.75 and the standard deviation is 0.024, measured in US dollars). (a) Find the probability of observing an exchange rate less than 0.762. (b) Find the probability of observing an exchange rate between 0.75 and 0.78 (c) Find a value m such that 0.75 + m > z > 0.75-rn 95% of the time. (d) Find a value...
The graph below shows the exchange rate between South African
Rand (abbreviated ZAR) and United States Dollars (USD), as
ZAR/USD.
From 1990 to 2000, was the rand appreciating against the dollar
or depreciating? Explain.
How many rand could 100 US dollars have been exchanged for in
2004, when the exchange rate was (approximately) 6 ZAR/USD?
How many US Dollars could 500 rand have been exchanged for in
2014, when the exchange rate was (approximately) 10 ZAR/USD?
13 12 6 4...
QUESTION 18 The USD/CAD spot rate is USD 0.7500 - USD 0.7505. The 6-month forward points are 10-20. What is the outright 6-month forward quotation? 0 USD 0.7510 - USD 0.7520 0 USD 0.7490 - USD 0.7485 0 USD 0.7510 - USD 0.7525 None of the answers is correct. QUESTION 19 Assume you are a French investor. You see that stock for British Airways has a bid price of EUR 36 and an ask price of EUR 36.5 on the...
3. You are given the following exchange rates: Exchange Rates Time 0 Time 1 So Si USD / GBP 1.8558 1.8561 USD/EUR 1.2674 1.2622 CAD / USD 1.3111 1.3129 MXN / USD 10.7575 10.6780 AUD/USD 1.3095 1.3025 ZAR / USD 6.8330 6.8850 Where: GBP = British Pound: CAD Canadian Dollar; MXN - Mexican Peso; AUD = Australian Dollar; ZAR = South African Rand Using the information above: a. Which foreign currencies are directly quoted? b. Which foreign currencies are indirectly...
Question 2 (a) Explain the difference between nominal exchange rate and real exchange rate (6) As mentioned in class, the Big Mac Index is a numerical tool for assessing disparities in consumer purchasing power between countries. Suppose that the Big Mac costs 7.50 Canadian dollars in Canada and 5.50 US dollars in the US. Suppose that the nominal exchange rate is 1.2 Canadian dollars to 1 US dollar. (i) Calculate the real exchange rate. (ii) Is the Canadian dollar undervalued...
If we know the exchange rate between Country A's currency and Country B's currency and we know the exchange rate between Country B's currency and Country C's currency, then we can compute the exchange rate between Country A's currency and Country C's currency. a. Suppose the exchange rate between the Japanese yen and the Canadian dollar is currently ¥106 = $1 and the exchange rate between the British pound and the Canadian dollar is £0.66 = $1. b. Suppose the...
This question is related to Foreign exchange and
international finance. Thanks, and definite thumbs up for
answers!
2 pts )\Question 29 Questions 23-36 are based on the following information: Transaction Exposure Problem: (34 points in total) Suppose that you (i.e., company XYZ) are a US-based importer of goods from Canada. You expect the value of the Canada to increase against the US dollar over the next 6 months. You will be making payment on a shipment of imported goods (CAD100,000)...
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