QUESTION 3 Suppose that the value of the yen depreciated by 14% from the Canadia

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QUESTION 3 Suppose that the value of the yen depreciated by 14% from the Canadian point of view. What is the percentage appreciation depreciation of the Canadian dollar from the Japanese point of view? Enter your answer in decimal format and round any intermediate steps and for final answer to four decimals (EX: XXXX) QUESTION 4 Suppose you observe the following quotes between the euro and the Mexican peso (Mexs) /1/14: Mex$20/ 1/1/15: .08/Mexs Find the percentage change in the value of the euro from the Mexican point of view. Round intermediate steps and your final answer to four decimals. O 375 ?-?? -375 0.60 none of the above

Explanation / Answer

Question 3

Value of Yen depreciated by 14% from canadian point of view. Hence Canadian dollar will appreciate from Yen point of view.

If 1 Canadian dollar was equal to 100 Yen before Yen depreciated, now after depreciation of Yen, 1 Canadian dollar will be equal to :

Canadian dollar = 100/ 1 - 0.14

= 116.2791 Yen

Hence, Canadian dollar will appreciate by 16.2791%

Question 4

1/1/14 : Mex$20/Euro

1/1/15 : Euro 0.08/ Mex$

On 1/1/15 , 0.08 Euro = 1 Mex$,

Hence, 0.08 x 12.5 Euro = 12.5 x 1 Mex$

or, 1 Euro = 12.5 Mex$

On 1/1/14 , 1 Euro = 20 Mex$

So, the value of Euro has depreciated.

Depreciation in the value of Euro = 20 - 12.5 / 20

= 7.5/20

= 0.375

Since the value has depreciated, answer must be negative.

So the percentage change in the value of Euro = - 0.375

Hence, correct option is (c)

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