1. Measuring movements in exchange rates The following table shows hypothetical monthly exchange rates for the Canadian dollar and the euro, as well as the standard deviation of the percentage changes for each currency. Use the table to select the percent change from March 1 to April 1 in the Canadian dollar exchange rate and the euro exchange rate. Value of the Canadian Dollar Month January 1 February 1 March 1 April 1 May 1 June 1 July 1 Standard Deviation (US Dollars per Canadian Dollar) $0.62 0.63 0.64 0.66 0.67 0.65 0.66 In this example, the value of the Monthly Percent Change in Canadian Dollar Value 1.61% 1.59% 1.52% -2.99% 1.54% 2.08% The percentage change in the Canadian dollar from March 1 to April 1 represents Value of Euro (US Dollars per euro) $1.14 1.16 1.18 1.15 1.13 1.15 1.16 a depreciation no change an appreciation was more volatile over the entire time period. Monthly Percent Change in Euro Value 1.75% 1.72% -1.74% 1.77% 0.87% 1.94% in the value of the Canadian dollar.
1. Measuring movements in exchange rates The following table shows hypothetical monthly exchange rates for the Canadian dollar and the euro, as well as the standard deviation of the percentage changes for each currency. Use the table to select the percent change from March 1 to April 1 in the Canadian dollar exchange rate and the euro exchange rate. Value of the Canadian Dollar Month January 1 February 1 March 1 April 1 May 1 June 1 July 1 Standard Deviation (US Dollars per Canadian Dollar) $0.62 0.63 0.64 0.66 0.67 0.65 0.66 In this example, the value of the Monthly Percent Change in Canadian Dollar Value 1.61% 1.59% 1.52% -2.99% 1.54% 2.08% The percentage change in the Canadian dollar from March 1 to April 1 represents Value of Euro (US Dollars per euro) $1.14 1.16 1.18 1.15 1.13 1.15 1.16 a depreciation no change an appreciation was more volatile over the entire time period. Monthly Percent Change in Euro Value 1.75% 1.72% -1.74% 1.77% 0.87% 1.94% in the value of the Canadian dollar.
Chapter4: Exchange Rate Determination
Section: Chapter Questions
Problem 3IEE
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![Attempts
1. Measuring movements in exchange rates
Average / 3
The following table shows hypothetical monthly exchange rates for the Canadian dollar and the euro, as well as the standard deviation of the
percentage changes for each currency.
Use the table to select the percent change from March 1 to April 1 in the Canadian dollar exchange rate and the euro exchange rate.
Value of the Canadian
Dollar
(US Dollars per
Canadian Dollar)
Month
January 1
February 1
March 1
April 1
May 1
June 1
July 1
Standard Deviation
In this example, the value of the
$0.62
0.63
0.64
0.66
0.67
0.65
0.66
Monthly Percent Change in
Canadian Dollar Value
1.61%
1.59%
1.52%
-2.99%
1.54%
2.08%
The percentage change in the Canadian dollar from March 1 to April 1 represents
Value of Euro
(US Dollars per
euro)
$1.14
1.16
1.18
1.15
1.13
1.15
1.16
a depreciation
no change
an appreciation
▼ was more volatile over the entire time period.
Monthly Percent Change in
Euro Value
1.75%
1.72%
-1.74%
1.77%
0.87%
1.94%
in the value of the Canadian dollar.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F346aae26-d0e0-42d3-8145-e419f49eefed%2Fa2791b72-1e2b-4484-a886-7524d6b5eab2%2Ffm5nu3p_processed.png&w=3840&q=75)
Transcribed Image Text:Attempts
1. Measuring movements in exchange rates
Average / 3
The following table shows hypothetical monthly exchange rates for the Canadian dollar and the euro, as well as the standard deviation of the
percentage changes for each currency.
Use the table to select the percent change from March 1 to April 1 in the Canadian dollar exchange rate and the euro exchange rate.
Value of the Canadian
Dollar
(US Dollars per
Canadian Dollar)
Month
January 1
February 1
March 1
April 1
May 1
June 1
July 1
Standard Deviation
In this example, the value of the
$0.62
0.63
0.64
0.66
0.67
0.65
0.66
Monthly Percent Change in
Canadian Dollar Value
1.61%
1.59%
1.52%
-2.99%
1.54%
2.08%
The percentage change in the Canadian dollar from March 1 to April 1 represents
Value of Euro
(US Dollars per
euro)
$1.14
1.16
1.18
1.15
1.13
1.15
1.16
a depreciation
no change
an appreciation
▼ was more volatile over the entire time period.
Monthly Percent Change in
Euro Value
1.75%
1.72%
-1.74%
1.77%
0.87%
1.94%
in the value of the Canadian dollar.
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