1. Cross rate: exchange rate quotations which do not include the U.S. dollar as
ID: 2726059 • Letter: 1
Question
1. Cross rate: exchange rate quotations which do not include the U.S. dollar as one of the two currencies listed. Any currency value can be stated in terms of any other currency. Example: Japanese yen and euro: ¥98.29/$ and €0.73/$. How many yen can you get per one euro? Show calculations and make sure to use proper notations.
2. If spot rate between the Japanese yen and the US dollar changed from ¥98.29/$ (spot 1) to ¥100/$ (spot 2), the percentage change of value of yen would be? spot1-spot2/spot1x100
Explanation / Answer
Answer 1
98.29Yen = 1 dollar
1 Yen =1/98.29
1 Yen = 0.010 dollar
0.73Euro = 1 Dollar
1 Euro = 1/0.73
1 Euro = 1.370 Dollar
1 Euro =(1.370/0.010) Yen
1 Euro = 137 Yen
Answer 2
Spot 1 - 1$ = 98.29 Yen
Spot 2 - 1$ = 100 Yen
((98.29-100)/98.29)*100
Depreciation by 1.74%
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