Question

1. A U.S. investor just received a foreign exchange rate quote for USD 1.1855/EUR. What kind...

1. A U.S. investor just received a foreign exchange rate quote for USD 1.1855/EUR. What kind of quote is this, in terms of direct vs indirect? How about in terms of American vs European?

1a. If a month later, the exchange rate between USD and EUR became USD1.1920/EUR. Without calculation, did EUR appreciate or depreciate against USD?

Homework Answers

Answer #1

1)For U.S investor USD is the home curreny and other Currencies are foreign currency.

A Direct Quote is a foreign Exchange rate Quoted in the Domestic Currency per unit of Foreign curreny.

Since investor is U.S and the quote is gIven for EUR (i.e Foreign currency ) so the given quote is a Direct quote.

Quote is given per unit of foreign currency.i.e EUR,  Hence it is a Direct Quote

USD 1.1855/ EUR indicates 1 EUR can purchase 1.1855 USD.

1a One month later Quote is given as USD 1.1920/ EUR

The quote USD 1.1920/ EUR inicates that 1 EUR can purchases 1.1920 USD.

Earlier 1 EUR can purchases only 1.1855 USD but now it can purchase 1.1920 USD.By this we can understand that EUR is appreciated against USD.

If you are having any doubts,please post a comment.

Thank you.please rate it.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Today the current EUR to USD exchange rate is 1 EUR = 1.19 USD. According to...
Today the current EUR to USD exchange rate is 1 EUR = 1.19 USD. According to the Bloomberg consensus estimate, the EUR to USD exchange rate in four years is forecasted to be 1 EUR = 1.31 USD. You begin with 100 USD today and will invest in a European security that provides 10% annual returns (in EUR). Using this information, answer the following six (6) questions. 1) Is the USD forecasted to appreciate or depreciate relative to EUR? a)...
1) Daily trading volume in the foreign exchange market was about ________ per ________ in 2019....
1) Daily trading volume in the foreign exchange market was about ________ per ________ in 2019. A) $6,600 billion; month B) $2,500 billion; month C) $6,600 billion; day D) $2,500 billion; day 2) Most foreign exchange transactions are through the U.S. dollar. If the transaction is expressed as the foreign currency per dollar this known as ________ whereas ________ are expressed as dollars per foreign unit. A) European terms; indirect B) American terms; direct C) American terms; European terms D)...
1. On January 1, 1975, the Mexican peso/U.S.$ exchange rate was Ps 12.5 = $1. By...
1. On January 1, 1975, the Mexican peso/U.S.$ exchange rate was Ps 12.5 = $1. By 1985, the exchange rate stood at Ps 208.9 = $1. a. Are these direct or indirect quotes? b. By how much did the Mexican peso appreciate or depreciate against the dollar over this 10-year period? c. By how much did the dollar appreciate or depreciate against the peso over this period? 2. In the second half of 1997, the Indonesian rupiah depreciated by 84%...
You have just landed in the airport of Frankfurt, Germany, ready to embark on the first...
You have just landed in the airport of Frankfurt, Germany, ready to embark on the first leg of your European holiday. Having arrived from the US, you have USD $5,000, that you wish to exchange into the local currency. You are also surprised to find a gift of JPY 30,000 that your parents have slipped into your luggage as additional spending money. You compare the exchange rates of the following dealers to obtain local currency: Brauhaus FX EUR/USD   1.21/1.13 EUR/JPY...
The U.S. dollar exchange rate increased from ?$1.24 Canadian in June 2015 to ?$1.29 Canadian in...
The U.S. dollar exchange rate increased from ?$1.24 Canadian in June 2015 to ?$1.29 Canadian in June 2016?, and it decreased from 121 Japanese yen in June 2015 to 108 Japanese yen in June 2016. What was the value of the Canadian dollar in terms of U.S. dollars in June 2015 and June 2016?? (2 decimal places) Did the Canadian dollar appreciate or depreciate against the U.S. dollar over the year June 2015 to June 2016??
1. Suppose the initial Brazilian real to US dollar exchange rate is 4 reals (or “reais”)...
1. Suppose the initial Brazilian real to US dollar exchange rate is 4 reals (or “reais”) to 1 US dollar. The cost to buy a specified market basket of same quality products is $500,000 in the U.S. and R$1,400,000 in Brazil. Valued in U.S. dollar terms, the market basket in Brazil costs $350,000. (This market basket cost represents the combined price of thousands of products, and so also indicates an average price for those products.) (a) Consider the incentives of...
Question 1 You are responsible for managing a US toy manufacturer. Recently your market share has...
Question 1 You are responsible for managing a US toy manufacturer. Recently your market share has dropped dramatically due to strong pricing competition from a China toy manufacturer. What could the US toy manufacturer do to offset this? What kind of help could the US toy manufacturer seek? Question 2 (4 points) The Canadian dollar per U.S. Dollar spot rate today, 3/1/2017 is 1.3500 / 1.3525 Canadian dollars per U.S. Dollar. The spot rate on 2/1/2017 was 1.3435 / 1.3450...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how the firms resources incompetencies support the given pressures regarding costs and local responsiveness. Describe entry modes have they usually used, and whether they are appropriate for the given strategy. Any key issues in their global strategy? casestudy: Atlanta, June 17, 2014. Sea of Delta employees and their families swarmed between food trucks, amusement park booths, and entertainment venues that were scattered throughout what would...
What role could the governance of ethics have played if it had been in existence in...
What role could the governance of ethics have played if it had been in existence in the organization? Assess the leadership of Enron from an ethical perspective. THE FALL OF ENRON: A STAKEHOLDER FAILURE Once upon a time, there was a gleaming headquarters office tower in Houston, with a giant tilted "£"' in front, slowly revolving in the Texas sun. The Enron Corporation, which once ranked among the top Fortune 500 companies, collapsed in 2001 under a mountain of debt...
Please answer the following Case analysis questions 1-How is New Balance performing compared to its primary...
Please answer the following Case analysis questions 1-How is New Balance performing compared to its primary rivals? How will the acquisition of Reebok by Adidas impact the structure of the athletic shoe industry? Is this likely to be favorable or unfavorable for New Balance? 2- What issues does New Balance management need to address? 3-What recommendations would you make to New Balance Management? What does New Balance need to do to continue to be successful? Should management continue to invest...