Go to the Yahoo! site for exchange rate data (finance.yahoo.com/currency-converter). What is the prevailing direct exchange rate of the Japanese yen? What is the prevailing direct exchange rate of the euro? Based on your answers to parts (a) and (b), show how to determine the number of yen per euro. One euro is equal to how many yen according to the converter in Yahool? Based on your answer to part (d), show how to determine how many euros are equal to one Japanese yen. Click on the euro to generate a historical trend of the direct exchange rate of the euro. Click on Max and review the euro’s exchange rate over the last five years. Briefly explain this trend (whether it is mostly upward or downward), and the point(s) at which an abrupt shift occurred in the opposite direction. Click on the euro to generate a historical trend of the indirect exchange rate of the euro. Click on Max and review the euro’s exchange rate over the last five years. Briefly explain this trend, and the point(s) at which an abrupt shift occurred in the opposite direction. How does this trend of the indirect exchange rate compare to the trend of the direct exchange rate?

FindFind

International Financial Management

14th Edition
Madura
Publisher: Cengage
ISBN: 9780357130698
FindFind

International Financial Management

14th Edition
Madura
Publisher: Cengage
ISBN: 9780357130698

Solutions

Chapter 3, Problem 1IEE
Textbook Problem

Go to the Yahoo! site for exchange rate data (finance.yahoo.com/currency-converter).

  1. What is the prevailing direct exchange rate of the Japanese yen?
  2. What is the prevailing direct exchange rate of the euro?
  3. Based on your answers to parts (a) and (b), show how to determine the number of yen per euro.
  4. One euro is equal to how many yen according to the converter in Yahool?
  5. Based on your answer to part (d), show how to determine how many euros are equal to one Japanese yen.
  6. Click on the euro to generate a historical trend of the direct exchange rate of the euro. Click on Max and review the euro’s exchange rate over the last five years. Briefly explain this trend (whether it is mostly upward or downward), and the point(s) at which an abrupt shift occurred in the opposite direction.
  7. Click on the euro to generate a historical trend of the indirect exchange rate of the euro. Click on Max and review the euro’s exchange rate over the last five years. Briefly explain this trend, and the point(s) at which an abrupt shift occurred in the opposite direction. How does this trend of the indirect exchange rate compare to the trend of the direct exchange rate?

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