Question

The value c Co. in American dollars, of the Canadian dollar is given by the graph in the rigure. S18+ 0.0 + C) Canddele + + sos0 L 1920 1919 (a) Describe how the value of the Canadian dollar fluctuated from 1990 to 2002. Give specific function values in your description where they are appropriate This answer has not been graded yet. (b) When was the Canadian dollar worth 75 American cents? (c) What was the average yearly decrease in the value of the Canadian dollar from 1996 to 20007 (d) for an American investor trading in Canadian dollars, what would have been ideal buy and sell dates? (Give your answer correct to the year year to buy year to sell Explain your answer.

Answer 1

Ans
a.	The Value of canadian dollar fluctuate from 1990 to 2002 in the continuous down trend
	In the year 1990 it started with approx $.88 and following the down trend it settled at $0.60
	It shows that during the perid 1990 to 2002 there had been continuous pressure on canadian dollar.
	For Function value it could be f(0.8), f(.7)
b.	In the year 1994 the canadian dollar was worth 75 american cent.
c.	Average yearly decrease from 1996 to 2000
	Year	Canadian Dollar value
	1996	0.73
	2000	0.68
	Average yearly decrease=	Cahnge in output/change in input
	=	0.68-0.73/2000-1996
	Average yearly decrease=	-1.25%
d.	Year of buy	1990
	Year of Sell	1991
	As there had been continuous down trend in the canadian dollar
	except during the year 1990 to 1991.
	As there had been continuous down trend the trader can take the
	short position to maximise the profit.