Question

QUESTION 5

1. Use the following chart to answer the next two questions.

   Currency	2017	2018	2019
   Pounds	£.8/$	$1.35/£	£.9/$
   Yen	¥125/$	¥122/$	$.007/¥
   Euros	€1.1/$	€/$.85	$.95/€

   1. What is the percentage appreciation/depreciation of the dollar from the British point of view from 2017 to 2018? Round intermediate steps and your final answer to four decimals. Express your answer in decimal format (ex. .XXXX)

   2.

   What is the percentage appreciation/depreciation of the euro from the US point of view from 2018 to 2019? Round intermediate steps to four decimals.

   		.1053
   		-.1053
   		.1176
   		-.1176
   		None of the above

Answer 1

part 1 -

2017 = £0.8/$ or $1.25/£

2018 = $1.35/£

% change in Value: (P1 - P0)/P0

= (1.35-1.25)/1.25

=8%, In this case the dollar value against the pound has been depreciated. Value of dollar in terms of pound rose from $1.25/£ to $1.35/£. It means Pound has strengthen against the dollar and dollar has weakened against the pound

Part B

2018 = €/$0.85

2019 = $.95/€ or €/$0.95

% change in Value: (P1 - P0)/P0

= (0.95-0.85)/0.85

= 0.1176

Answer Option 3

Euro has been depreciated against the dollar