Question
2. Go to the St. Louis Federal Reserve FRED database and find data on the monthly U.S. dollar exchange rate to the Chinese yuan (EXCHUS),
2. Go to the St. Louis Federal Reserve FRED database and find data on the monthly U.S.
dollar exchange rate to the Chinese yuan (EXCHUS), the Canadian dollar (EXCAUS),
and the South Korean won (EXKOUS). Download the data into a spreadsheet.
a. For the most recent five-year period of data available, use the average, max, min, and
stdev functions in Excel to calculate the average, highest, and lowest exchange rate
values, as well as the standard deviation of the exchange rate to the dollar (this is an
absolute measure of the volatility of the exchange rate).
b. Using the maximum and minimum values of each exchange rate over the last five years,
calculate the ratio of the difference between the maximum and minimum values to the
average level of the exchange rate (expressed as a percentage by multiplying by 100).
This value gives an indication of how tightly the exchange rate moves. Based on your
results, which of the three countries is most likely to peg its currency to the U.S. dollar?
How does this country's currency compare with the other two?
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