The statement “the yen rose today against the dollar from 121 to 117” will only make sense if The U.S. gains when Japan loses. These numbers measure yen per dollar, not dollars per yen. These numbers are indexes, defined relative to a base of 100. These numbers refer to time of day that the change took place. The yen is a reserve currency.

The statement “the yen rose today against the dollar from 121 to 117” will only make sense if The U.S. gains when Japan loses. These numbers measure yen per dollar, not dollars per yen. These numbers are indexes, defined relative to a base of 100. These numbers refer to time of day that the change took place. The yen is a reserve currency.

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter4: Exchange Rate Determination

Section: Chapter Questions

Problem 1IEE

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Suppose that today the exchange rate between the U.S. dollar and the Chinese yuan is $1 = .12 yuan. If next week the exchange rate is $1 = .20 yuan, it is clear that: A)The yuan has depreciated relative to the dollar. B)Both currencies have depreciated. C)The dollar has depreciated relative to the yuan. D)Both currencies have appreciated
If the spot FX rate for the Chinese Yuan (CNY) changes from CNY6.7855/$ to CNY6.652/$, has Chinese Yuan depreciated against the US dollar? If the spot FX rate for the Japanese Yen (JPY) changes from $0.0085/Yen to $0.0077/Yen, has the US dollar depreciated against Japanese Yen?
In 2018, the yen went from $0.00887619 to $0.00906626. • By how much did the yen appreciate against the dollar? • By how much has the dollar depreciated against the yen?
On May 1, 2XX3, a bundle of goods in China costs 5,000,000 yuan, while the same goods cost $60,000 in the United States. Over the next year, inflation in the U.S. is expected to be 3%, while inflation in China is expected to be 5%. Which of the following statements is true? A. In one year the exchange rate is $84.9515/yuan and the dollar has appreciated against the yuan. B. In one year the exchange rate is $0.0118/yuan and the dollar has appreciated against the yuan. C. In one year the exchange rate is $84.9515/yuan and the dollar has depreciated against the yuan. D. In one year the exchange rate is $0.0118/yuan and the dollar has depreciated against the yuan. E. In one year the exchange rate is 84.9515yuan/$ and the dollar has depreciated against the yuan.
In Jan 2003, the interest rate on the Japanese Yen was 1.91%, and on the Australian dollar was 5.86%. The spot rate was S(V/AU$)-75.49. Tom Bohn, a hedge fund trader specializing in FX trading in Blackrock Inc, started a carry trade between Yen and Australia for one year. Then the carry (interest rate differential) between Yen and AU$ was % (Two decimal places in your answer.
Assume the current U.S. dollar-yen spot rate is $0.0088/¥. Further, the current nominal 1-year rate of return in Japan is -0.112% and 0.14% in the United States. What is the estimated forward exchange rate for 270 days? Use maximal decimals in your calculations. ¥113.42/$ ¥113.85/$ ¥113.64/$ ¥113.35/$
Over the past year, China has experienced an inflation rate of 22 percent, in contrast to the U.S. inflation of 3 percent. At the same time, the exchange rate has gone from Y8.7 per U.S. $1to Y8.3 per U.S.\$1. Calculate the change in the real value of the yuan over the past year.
In April 2018, the China-US exchange rate was 6.37 C/Y. In October, it was 6.93 C/Y. What is the percentage change for the US and China over that 6 month period?
The Japanese yen increases in value relative to the dollar, moving from 120 yento 110 yen to each U.S. dollar. From the perspective of a U.S. firm that produces in the UnitedStates and exports its product to sell in Japan:a. This is bad news.b. It doesn’t matter.c. This is good news
The spot rate between the Japanese yen and the U.S. dollar is ¥108.52/$, while the one-year forward rate is ¥108.77/$. The one-year risk-free rate in the U.S. is 2.99 percent. If interest rate parity exists, what is the one-year risk-free rate in Japan?
Caleb Fajardo and Yen–Dollar Parity. Caleb Fajardo is attempting to determine whether U.S./Japanese financial conditions are at parity. The current spot rate is a flat ¥89.00 = $1.00, while the 360-day forward rate is ¥84.90 = $1.00. Forecast inflation is 1.100% for Japan and 5.900% for the United States. The 360-day euroyen deposit rate is 4.700%, and the 360-day eurodollar deposit rate is 9.500%. Diagram and calculate whether international parity conditions hold between Japan and the United States. Find the forecasted change in the Japanese yen to U.S. dollar exchange rate one year from now.
1) The difference between direct and indirect quotes: What is a direct pound for euro quote? What is a direct dollar quote for pound? What is an indirect dollar quote for yen? What is the indirect Swiss franc for pound quote? 2) Nominal annualized realized appreciation: Two months ago the price of a dollar in Tokyo was 95.6789. Today it is 93.5432. What is annualized realized yen appreciation? Four months ago direct dollar quote for pound was 1.2468. Today it is 1.1357. What is annualized realized pound appreciation? 3) Appreciation vs depreciation: How much did the dollar appreciate if the euro depreciated 3.5778% against the dollar? 4) Buying and selling For-Ex with bid-as quotes: How many dollars do you need to buy 3 million euros if the indirect dollar quote for euro is 0.8972-13? How many Swiss francs will you get from one billion yen if the price of Swiss franc in Tokyo is 101.3050-15? How many dollars will you get from 6 million pounds if the direct dollar quote for…

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		The U.S. gains when Japan loses.
		These numbers measure yen per dollar, not dollars per yen.
		These numbers are indexes, defined relative to a base of 100.
		These numbers refer to time of day that the change took place.
		The yen is a reserve currency.