Question

Question 1 - Topic: Foreign Exchange Market (10 marks) The exchange rate between Fiji dollar and...

Question 1 - Topic: Foreign Exchange Market
The exchange rate between Fiji dollar and the New Zealand dollar (FJD/NZD)
rose from 1.3900 (Mar 3, 2020) to 1.3960 (Mar 4, 2020).
a) Calculate the percentage appreciation or depreciation of the New Zealand
dollar [2 marks]
b) Using the result obtained in (a), calculate the percentage appreciation or
depreciation of Fiji dollar. [2 marks]
c) Calculate or quote the corresponding values in terms of NZD/FJD.
[2 marks]
d) Using the results obtained in (c), calculate percentage appreciation or
depreciation of the FJD. [2 marks]
e) Using the results obtained in (d), calculate the percentage appreciation or
depreciation of the New Zealand dollar. [2 marks]

Exchange Rate = 1NZD = 1.3900 FJD on March 03,2002

and 1NZD = 1.3960 FJD on March 04,2020

a) Percentage Appreciation on the New Zealand Dollars = (1.3960 - 1.3900) / 1.3900

=0.0060/1.3900

= 0.4316%

b) Percentage Depreciaiton on the FJ Dollars =(1.3900 -1.3960) / 1.3960

= -0.0060/1.3960

= - 0.42979%

c) Quote the corresponding values in terms of NZD/FJD

Exchange Rate = 1NZD = 1.3900 FJD on March 03,2002

converting to 1FJD to NZD

FJD = 1/1.3900 NZD

FJD = 0.7194 NZD

and 1NZD = 1.3960 FJD on March 04,2020

converting to 1FJD to NZD

FJD = 1/1.3960 NZD

FJD = 0.7163 NZD

Percentage of Depreciation of FJD = ( 0.7163 -0.7194 ) / 0.7194

=- 0.4309%

Percentage of Appreciation of NZD =(0.7194 - 0.7163) / 0.7163

=0.4327%

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