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Exchange Rate Calculation Methods

This document discusses exchange rates and contains questions about: 1) Defining exchange rates using different methods like the gold standard, purchasing power parity, and cross exchange rates, as well as the advantages and disadvantages of each. 2) Factors that affect exchange rates. 3) How exchange rates are impacted when the supply of foreign currency decreases and demand increases, or vice versa. 4) Calculating cross exchange rates between different currency pairs. 5) Calculating income in different currencies based on exchange rates.

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13 views2 pages

Exchange Rate Calculation Methods

This document discusses exchange rates and contains questions about: 1) Defining exchange rates using different methods like the gold standard, purchasing power parity, and cross exchange rates, as well as the advantages and disadvantages of each. 2) Factors that affect exchange rates. 3) How exchange rates are impacted when the supply of foreign currency decreases and demand increases, or vice versa. 4) Calculating cross exchange rates between different currency pairs. 5) Calculating income in different currencies based on exchange rates.

Uploaded by

Tường Vyv
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd

EXERCISE – CHAPTER 2

***
1. What is exchange rate? How to determine exchange rate under gold
standard method; under Purchasing power parity; and under cross exchange
rate method? Advantages and Disadvantages of each method?
2. What factors affect to the exchange rate?
3. What happen to the exchange rate when:
- Supply for foreign currency decreases, Demand for foreign
currencies increases.
- Supply for foreign currency increases, Demand for foreign
currencies decreases.

4. Calculate the cross exchange rates below:


1. AUD/USD = 0.9703/23
EUR/USD = 1.1612/22
USD/VND = 20,400/650
Caculate AUD/VND; EUR/VND and EUR/AUD

2. USD/JPY = 115.15/25
USD/CNY = 7.7575/85
USD/VND = 20,100/400
Caculate JPY/VND ; CNY/VND and CNY/JPY

3. USD/SGD = 1.5050/60
NZD/USD = 0.7075/85
USD/VND = 20,400/650
Tính SGD/VND ; NZD/VND và NZD/SGD

5. Calculate the income of firms in some case below :


1. A Vietnamese exporter receives 250.000 EUR from exporting goods
to Germany. Caculate its income in terms of USD. Supposing that
EUR/USD = 1.3289/95

2. A Vietnamese exporter receives 250.000 EUR from exporting goods


to Germany. Caculate its income in terms of USD. Supposing that
USD/EUR = 0.9723/50

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