Chap10 Pbms MBF12e

Chap10 Pbms MBF12e - Problem 10.1 Canadian Loonie Change in...

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Unformatted text preview: Problem 10.1 Canadian Loonie Change in the value Starting Value Ending Value of the loonie Time Period (C$/US$) (C$/US$) (percent) Jan 1980 - Dec 1985 1.18 1.40 -15.7% Jan 1986 - Dec 1991 1.40 1.14 22.8% Jan 1992 - Dec 2001 1.14 1.60 -28.8% Jan 2002 - Dec 2007 1.60 1.00 60.0% Percent change = (Starting Value - Ending Value ) / (Ending Value) The Canadian dollars value against the U.S. dollar has seen some significant changes over recent history. Use the following graph of the C$/US$ exchange rate for the 27 year period between 1980 and end-of-year 2007 to estimate the percentage change in the Canadian dollars value (its affectionately known as the "loonie") versus the dollar for the following periods. The following values are taken by "eye-balling" the graph. Although you may not have the exact same values, you should be close. Problem 10.2 Brazilian Reais Assumptions Values Spot rate, Monday January 11, 1999, R$/$ 1.21 Spot rate, Friday January 15, 1999, R$/$ 1.43 Calculation percentage appreciation or depreciation Percentage change in the real versus the dollar-15.38% Because the real fell in value: Depreciation Percent change = (Old Rate - New Rate ) / (New Rate) The Brazilian reais' (R$) value was R$1.21/$ on Monday January 11, 1999. Its value fell to R$1.43/$ on Friday January 15, 1999. What was the percentage change in its value? Problem 10.3 Turkish Lira Assumptions Values Spot rate, February 20, 2001 (TL/$) 68,000 Turkish government announces a devaluation of:-20.00% Spot rate, February 24, 2001 (TL/$) 100,000 a. What was the exchange rate after devaluation? Spot rate after devaluation 85,000 Check calculation: percentage change in values-20.0% b. What was percentage change after falling to TL100,000/$? Percentage change from initial value-32.0% Percentage change from "devalued" value-15.0% The Turkish lira (TL) was officially devalued by the Turkish government in February 2001 during a severe political and economic crisis. The Turkish government announced on February 21st that the lira would be devalued by 20%. The spot exchange rate on February 20th was TL68,000/$. Problem 10.4 Euros and the Yen Change in the Starting Value Ending Value value of the yen Time Period (percent) Jan 1994 - Aug 1998 124 160 -22.5% Sep 1998 -Oct 2000 160 94 70.2% Nov 2000 - Dec 2007 94 185 -49.2% Percent change = (Starting Value - Ending Value ) / (Ending Value) The Japanese yen-euro cross rate is one of the more significant currency values for global trade and commerce. The graphic at right shows this cross-rate back-calculated from early 1994 through the end-of-year 2007. (Remember the euro was not launched until January 1999, but its value can be back-calculated from its component currencies.) Estimate the change in the value of the yen over the following three periods of change....
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Chap10 Pbms MBF12e - Problem 10.1 Canadian Loonie Change in...

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