Ch05_SSol - As illustrated in the graph below, the...

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Problem 5.4 Russian ruble Assumptions Values Spot rate, August 7, 1998 (Rub/$) 6.25 Spot rate, September 10, 1998 (Rub/$) 20.00 Calculation of percentage change: Percentage change in the peso versus the dollar -68.75% The Russian ruble ( R) traded at R6.25/$ on August 7, 1998. By September 10, 1998, its value had fallen to R20.00/$. What was the percentage change in its value?
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Problem 5.7 Forecating the Argentine peso "Eye-balled" Date Values February 1st (Ps/$) 2.00 February 28th (Ps/$) 2.20 Percent change -9.09% If peso continued to fall at same rate for 1 month: March 1, 2002 (Ps/$) 2.20 Percent change -9.09% March 30, 2002 (Ps/$) 2.42 The period immediately following the peso's devaluation was highly volatile and a period of transition. Most forecasters would view the February period as a period in which the new exchange rate is beginning to "stabilize" in its trading.
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Unformatted text preview: As illustrated in the graph below, the Argentine peso moved from its fixed exchange rate of Ps1.00/$ to over Ps2.00/$ in a matter of days in early January 2002. After a brief period of high volatility, the peso's value appeared to settled down into a range varying between 2.0 and 2.5 pesos per dollar. If you were forecasting the Argentine peso further into the future, how would you use the ifnormation in the graphic -- the value of the peso freely-floating in the weeks following devaluation -- to forecast its future value? Source: 2002 by Prof. Werner Antweiler, University of British Columbia, Vancouver, BC, Canada. Time period shown in diagram: Jul 1, 2000 - Jan 27, 2002....
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This note was uploaded on 07/27/2011 for the course ECON 101 taught by Professor Dr. during the Spring '11 term at Columbia Union.

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Ch05_SSol - As illustrated in the graph below, the...

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