Exchange Rate Questions

You will use several websites to answer the questions here.

Name


  1. Go to www.preev.com. This is a site that shows the realtime value of 1 Bitcoin. Pretend you pay me for one bitcoin right now. How much did you pay me?


  1. Open up a new tab. Go to www.x-rates.com. Using the exchange rate table on the middle of the page (don't click anything it's already on there), how many British Pounds can you get for 1 dollar? If I have 1 Euro, how many US dollars can I get?


  1. Using the same table, if I have 5 Euros, how many Australian Dollars can I get in exchange?



  1. Which currency is strongest in terms of ability to buy other currencies? How do you know?


  1. Above the exchage rate table there is an option called GRAPHS. Click that. Put Euro in the second box (on the left) and Chinese Yuan Renminbi in the bottom box.
    You are now looking at how many Yuan you can get for 1 Euro. In other words, the line on the graph is showing what 1 Euro is worth over time.
    Based on the April data so far, would European companies that import Chinese products look favorably or unfavorably on the April data? Why? Use appreciated or depreciated in your answer.


  1. Now put "US Dollar" in the 2nd box and SEK "Swedish Krona" in the bottom box. You are now looking at a graph of how many Swedish Krona you can get for 1 Dollar (or the value of the dollar in terms of Krona). Stretch the graph out so you can see the data back to January.

    Assume an American citizen took a trip to Sweden in early January. Upon her arrival, she exchanged $100 us dollars into Krona (about 790 Krona), which she never spent. She kept her 790 Krona the entire trip.

    She is coming home today and is about to exchange her 790 Krona into dollars.

    Will she make money or lose money and why? Use either depreciated or appreciated in your answer.


  1. Keep "US Dollar" in the second box and put ARS "Argentine Peso" in the bottom box and look at the data for the last year (1Y).

    Assume a citizen of Argentina bought a 1 year $100 treasury bond from the United States last April 13th. Assume that bond matures today and he will now receive $100, which he will then switch to Argentine Pesos. Has he gained or lost money? Why? Use appreciated or depreciated in your answer.


  1. On the same site, click the currency calculator on the left (it looks like a calculator in blue). Convert 5 American Dollars into Indian Rupees. How many Indian Rupees can I get for 5 US Dollars?


  1. I see a CD online I want that costs $18.99 Euros. How much should I expect to pay if I live in South Korea?


  1. Now put US Dollars in the second box and Euros in the bottom box. Click the +/- box that calculates monthly average. I went to Germany in June 2009. One of my best friends went in June 2008. Which of us got the better deal on the exchange rate?


  1. In a new tab, go to www.howstuffworks.com and search for "exchange rates." In the middle of the page, click on the link that says: "How Exchange Rates Work." You will use this article for questions 11-13.

    What is an exchange rate? (Cost of Money section)


  1. What forces determine the value of currency in a floating system? (Methods of Exchange section) Why are floating systems viewed as more efficient than pegged systems?


  1. Why was the introduction of the Euro such a big deal in the world currency market? (The Euro) Give three advantages the Euro offered the countries of Europe that decided to use it.


  1. Look at preev.com again and look back at your answer to question #1. Assume I now buy your bitcoin back from you at the current market rate. Have you gained, lost, or remained the same?