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QUESTION ONE a) Gulian a student at a local college wants to purchase ZAR20 000,00 to buy a laptop for h studies from an online
QUESTION ONE a) Gulian a student at a local college wants to purchase ZAR20 000,00 to buy a laptop for h studies from an online dealer in South Africa. Whilst Brighton wants to sell ZAR20 000.0 received from her parents in diaspora so that he can pay his university fees. Gulian and Brighto both approached their local forex dealer, who quotes a bid and offer of USD1.7605/ZAR an USD 1.7765/ZAR, respectively. 1) Interpret what this quotation would mean to Gulian and Brighton 12 marks) ii) Compute the amount Gulian would pay and Brighton receive from the trade. [2 marks] iii) If the dollar appreciates 10%, calculate the new bid and offer exchange rates. [3 marks] iv) At 10% appreciation of the dollar, calculate the percentage rate of depreciation for the rand. [3 marks) b) Discuss some of the factors that would cause a currency to depreciate or appreciate [15 marks TOTAL 125 marks] QUESTION ONE a) Gulian a student at a local college wants to purchase ZAR20 000,00 to buy a laptop for h studies from an online dealer in South Africa. Whilst Brighton wants to sell ZAR20 000.0 received from her parents in diaspora so that he can pay his university fees. Gulian and Brighto both approached their local forex dealer, who quotes a bid and offer of USD1.7605/ZAR an USD 1.7765/ZAR, respectively. 1) Interpret what this quotation would mean to Gulian and Brighton 12 marks) ii) Compute the amount Gulian would pay and Brighton receive from the trade. [2 marks] iii) If the dollar appreciates 10%, calculate the new bid and offer exchange rates. [3 marks] iv) At 10% appreciation of the dollar, calculate the percentage rate of depreciation for the rand. [3 marks) b) Discuss some of the factors that would cause a currency to depreciate or appreciate [15 marks TOTAL 125 marks]
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