(International Finance)

Computing a Currency changes

= (e1 - e0 )/ e0

where e0 = old currency value

e1 = new currency value

(a) If the dinar devalues against the U.S. dollar by 45%, the U.S. dollar will appreciate against the dinar by how much?

(b) On Friday, September 13, 1992, the lira was worth DM 0.0013. Over the weekend the lira devalued against the DM to DM 0.0012. By how much had the lira devalued against the DM?