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Exercises: The Foreign Exchange Market and Exchange Rate Determination EXERCISE 3 (Exchange rate determination) In 1995, one
Exercises: The Foreign Exchange Market and Exchange Rate Determination EXERCISE 3 (Exchange rate determination) In 1995, one
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Answer #1

a) dollar value of yen in:

1995: 1/80 = $0.0125/yen Answer

2000: 1/110 = $0.009/yen Answer

b) Yen fallen by = (0.0125 - 0.009)/0.0125

= 0.28 = 28% Answer

c) Dollar rise = (110 - 80)/80

= 30/80

= 0.375 = 37.5% Answer

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