If we know the exchange rate between Country A's currency and Country B's currency and we know
Question:
If we know the exchange rate between Country A's currency and Country B's currency and we know the exchange rate between Country B's currency and Country C's currency, then we can compute the exchange rate between Country A's currency and Country C's currency.
a. Suppose the exchange rate between the Japanese yen and the U.S. dollar is currently ¥95 = $1 and the exchange rate between the British pound and the U.S. dollar is £0.64 = $1. What is the exchange rate between the yen and the pound?
b. Suppose the exchange rate between the yen and the dollar changes to ¥100 = $1 and the exchange rate between the pound and the dollar changes to £0.55 = $1. Has the dollar appreciated or depreciated against the yen? Has the dollar appreciated or depreciated against the pound? Has the yen appreciated or depreciated against the pound?
Exchange RateThe value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...
Step by Step Answer:
a 95 064 or 14844 1 b The dollar has appreciated against the yen because ...View the full answer
