FRONT PAGE ECONOMICS The FTX Collapse In a mere 10 days, $32 billion vanished into thin air. That was the market value on November 8, 2022, of the cryptocurrency exchange company called FTX. FTX had an exchange platform that handled customer purchases and sales of cryptocurrencies, including its own FTT. Like Bitcoin, FTT was a cryptocurrency that could be used to transfer money, make purchases, or be held as wealth. Or so people thought. In reality, a lot of money deposited into FTX customer accounts was being diverted into the personal accounts of the company's owner and key associates. When customers wanted to withdraw their deposits, the cupboard was bare. On November 11, 2022, FTX filed for bankruptcy. The price of an FTT token fell from $24 on November 8 to $1.27 on November 23. Thousands of FTX customers and investors lost millions of dollars, including celebrities like Tom Brady, Steph Curry, and Naomi Osaka. The University of California football team and the Miami Heat also had to withdraw the naming rights they had bestowed on FTX for its generous contributions. Source: News reports November 2022. Instructions: In part a, round your response to two decimal places. In part b, round your response to one decimal place. a. By how much did the price of an FTT token decline between November 8 and November 23? $ b. What was the percentage decline in value? %

Economics:
10th Edition
ISBN:9781285859460
Author:BOYES, William
Publisher:BOYES, William
Chapter12: Money And Banking
Section: Chapter Questions
Problem 3E
Question
FRONT PAGE ECONOMICS
The FTX Collapse
In a mere 10 days, $32 billion vanished into thin air. That was the market value
on November 8, 2022, of the cryptocurrency exchange company called FTX.
FTX had an exchange platform that handled customer purchases and sales of
cryptocurrencies, including its own FTT. Like Bitcoin, FTT was a cryptocurrency
that could be used to transfer money, make purchases, or be held as wealth.
Or so people thought. In reality, a lot of money deposited into FTX customer
accounts was being diverted into the personal accounts of the company's
owner and key associates. When customers wanted to withdraw their deposits,
the cupboard was bare.
On November 11, 2022, FTX filed for bankruptcy. The price of an FTT token fell
from $24 on November 8 to $1.27 on November 23. Thousands of FTX
customers and investors lost millions of dollars, including celebrities like Tom
Brady, Steph Curry, and Naomi Osaka. The University of California football
team and the Miami Heat also had to withdraw the naming rights they had
bestowed on FTX for its generous contributions.
Source: News reports November 2022.
Instructions: In part a, round your response to two decimal places. In part b, round your response to one decimal place.
a. By how much did the price of an FTT token decline between November 8 and November 23?
$
b. What was the percentage decline in value?
%
Transcribed Image Text:FRONT PAGE ECONOMICS The FTX Collapse In a mere 10 days, $32 billion vanished into thin air. That was the market value on November 8, 2022, of the cryptocurrency exchange company called FTX. FTX had an exchange platform that handled customer purchases and sales of cryptocurrencies, including its own FTT. Like Bitcoin, FTT was a cryptocurrency that could be used to transfer money, make purchases, or be held as wealth. Or so people thought. In reality, a lot of money deposited into FTX customer accounts was being diverted into the personal accounts of the company's owner and key associates. When customers wanted to withdraw their deposits, the cupboard was bare. On November 11, 2022, FTX filed for bankruptcy. The price of an FTT token fell from $24 on November 8 to $1.27 on November 23. Thousands of FTX customers and investors lost millions of dollars, including celebrities like Tom Brady, Steph Curry, and Naomi Osaka. The University of California football team and the Miami Heat also had to withdraw the naming rights they had bestowed on FTX for its generous contributions. Source: News reports November 2022. Instructions: In part a, round your response to two decimal places. In part b, round your response to one decimal place. a. By how much did the price of an FTT token decline between November 8 and November 23? $ b. What was the percentage decline in value? %
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