Each student should study the HBS Case: Foreign Exchange Markets and Transactions and answer the following questions STATE EACH QUESTION BEFORE PROVIDING THE ANSWER (AND EACH QUESTION MUST BE ANSWERED SEPARATELY) Assignments: Foreign Exchange Markets and Transactions 1. Briefly describe the Foreign Exchange Market. What mechanisms created the need for the Foreign Exchange Market and why is the market important to the global economy? 2. What is an exchange rate? Using figures to ilustrate, explain the difference between the indirect and direct quotes of exchange rates 3. In terms of currency fluctuations, explain the difference between currency appreciation and depreciation. Complete ser son page 25 in the case 4. Explain cross-exchange rates using Formula 1 shown on page 7. Given that USD-MX exchange rate is (0.08675 USD - 1MXN) and USD NPR exchange rate is (0.02167 USD = INPR), find the MXN-NPR Cross rate 5. Define the Bid and Ask prices as they relate to exchange rates. Using the Bid Ask Spread Formula 2 on page 8, recalculate Example 4-Bidik Spreads and cost of currency conversion with the assumption that you want to convert $1,200 (Al other information remains the same DO NOT WAIT UNTIL THE LAST MINUTE TO COMPLETE ASSIGNMENTS! Your feedback is due latest by 12:00 pm on Wednesday, November 17. NO EXCEPTION for any student who will wait until the last minute Each student should study the HBS Case: Foreign Exchange Markets and Transactions and answer the following questions STATE EACH QUESTION BEFORE PROVIDING THE ANSWER (AND EACH QUESTION MUST BE ANSWERED SEPARATELY) Assignments: Foreign Exchange Markets and Transactions 1. Briefly describe the Foreign Exchange Market. What mechanisms created the need for the Foreign Exchange Market and why is the market important to the global economy? 2. What is an exchange rate? Using figures to ilustrate, explain the difference between the indirect and direct quotes of exchange rates 3. In terms of currency fluctuations, explain the difference between currency appreciation and depreciation. Complete ser son page 25 in the case 4. Explain cross-exchange rates using Formula 1 shown on page 7. Given that USD-MX exchange rate is (0.08675 USD - 1MXN) and USD NPR exchange rate is (0.02167 USD = INPR), find the MXN-NPR Cross rate 5. Define the Bid and Ask prices as they relate to exchange rates. Using the Bid Ask Spread Formula 2 on page 8, recalculate Example 4-Bidik Spreads and cost of currency conversion with the assumption that you want to convert $1,200 (Al other information remains the same DO NOT WAIT UNTIL THE LAST MINUTE TO COMPLETE ASSIGNMENTS! Your feedback is due latest by 12:00 pm on Wednesday, November 17. NO EXCEPTION for any student who will wait until the last minute
