[Multinational Financial Management, Alan C. Shapiro, 10th edition, page 147]

Application: calculating the Real Exchange Rate for the JPY - (b)

The real value of Yen.

The beginning rate: JPY 249.05/USD is both Nominal Rate and Real Rate [as the calculation base]

The closing rate: JPY144.32/USD is the Real Rate calculated from CPI as in Step (a)

Reformat the exchange rate as following:

Beginning rate: JPY 249.05/USD >>> 0.004015258 USD/JPY

Closing rate: JPY144.32/USD >>>> 0.0069286577 USD/JPY

The Real Rate of JPY changes % against USD = (0.0069286577-0.004015258)/0.004015258=0.7255821917 = 72.56%

However, the textbook solution is 24%. What could be wrong?

Thanks

SHC