Question
a. Assume Polands currency (the zloty) is worth $.17 and the Japanese yen is worth $.008. What is the cross rate of the zloty with
a. Assume Polands currency (the zloty) is worth $.17 and the Japanese yen is worth $.008. What is the cross rate of the zloty with respect to yen? That is, how many yen equal a zloty?
b. Let us assume that today you notice the following exchange rate quotations:
- $1 = 3.00 Argentine pesos
- 1 Argentine peso = 0.50 Canadian dollars
You need to purchase 100,000 Canadian dollars with U.S. dollars. How many U.S. dollars will you need for your purchase?
c. Assume that a bank's bid rate on Swiss francs is $.45 and its ask rate is $.47. Its bid-ask percentage spread is:
d. What is the relationship between the value of a countrys currency and its current account balance? (Please explain your answer).
e. Please present the graph and idea (explain) behind the J curve.
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