International Financial Management
14th Edition
ISBN: 9780357130698
Author: Madura
Publisher: Cengage
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Based on the table below, which currencies depreciated between January and March?
Name of Currency
Exchange Rate JANUARY
$1 =
Exchange Rate MARCH
$1 =
Romanian Leu
4.37
4.30
South African Rand
16.14
18.18
Swedish Krona
9.15
9.10
Tunisian Dinar
2.88
2.92
a.
South African Rand
b.
Tunisian Dinar
c.
Romanian Leu
d.
Swedish Krona
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
Upon reading in the newspaper that the dollar exchange rate with the euro has depreciated 12% in the last month, after a 15% appreciation in the previous month, one of your friends tells you, “I don’t understand a thing about these currency fluctuations. Surely the market must be irrational. Nothing justifies such large movements up and down.” What is your response?
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- Some of the websites show graphs indicating how one currency has done relative to another currency. a. Over the past year, how has the pound performed against the dollar? Does the dollar buy more or less pounds today than it did 1 year ago? b. Over the past year, how has the dollar performed against the yen? Does the dollar buy more or less yen today than it did 1 year ago?arrow_forwardMatch each term in Column A with its related definition in Column B. Column A 1. ____________ Spot rate 2. ____________ Currency appreciation 3. ____________ Translation risk 4. ____________ Transaction risk 5. ____________ Exchange rate Column B a. The rate at which one currency can be traded for another currency. b. The possibility that future cash transactions will be affected by changing exchange rates. c. A month ago, 1 U.S. was worth 8.5 Mexican pesos. Today, 1 is worth 9.0 Mexican pesos. The U.S. dollar has undergone what? d. The degree to which a firms financial statements are exposed to exchange rate fluctuation. e. The exchange rate of one currency for another for immediate delivery (today).arrow_forwardIn 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?arrow_forward
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The Exchange Rate and the Foreign Exchange Market [AP Macroeconomics Explained]; Author: Heimler's History;https://www.youtube.com/watch?v=JsKLBpy6cEc;License: Standard Youtube License