r Peg for Hong Kong. The Hong Kong dollar (HKD) has long been pegged to the U.S. dollar (USD) at HKD7.80 = USD1.00. When the Chinese yuan (CNY) was revalued in July 2005 against the U.S. dollar from CNY8.28 = USD1.00 to CNY8.11 = USD1.00, how did th

r Peg for Hong Kong. The Hong Kong dollar (HKD) has long been pegged to the U.S. dollar (USD) at HKD7.80 = USD1.00. When the Chinese yuan (CNY) was revalued in July 2005 against the U.S. dollar from CNY8.28 = USD1.00 to CNY8.11 = USD1.00, how did th

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter11: Managing Transaction Exposure

Section: Chapter Questions

Problem 2IEE

See similar textbooks

Related questions

Q: A bank is quoting the following exchange rates against the dollar for the Swiss franc and the…

A: Formula used:

Q: am. 126.

A: The Purchasing Power Parity (PPP) theory states that the exchange rate between two countries should…

Q: a) Indirect dollar quotes for yen and pound are 100.2468-3579 and 1.3579-654, respectively. What is…

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: True or false The spot rate of foreign exchange between Thailand and the United States is ฿30.7/$.…

A: Currency depreciates when its value decreases.

Q: The following are quotes for four currencies with the quote in terms of US dollars per unit.…

A: Foreign Currency Exchange: The price of the domestic currency relative to another currency is…

Q: Using Exchange Rates Use the information below to answer the following questions. U.S. $…

A: The exchange rate is the rate at which the currencies of two different countries are traded in the…

Q: The chart below shows the exchange rate between the U.S. dollar and Norway's currency, the kroner,…

A: Given, The chart that shows the exchange rate between US dollar and Kr.

Q: 1. Measuring movements in exchange rates The following table shows hypothetical monthly exchange…

A: A currency exchange rate is the rate at which one country's currency can be exchanged for another…

Q: Assume that 1 U.S. dollar can be exchanged for 105 Japanese yen or for 0.80 euro.What is the…

A: Exchange rate the rate at which currency of one country can be exchanged for other currency. These…

Concept explainers

Instruments of Foreign Exchange Market

Foreign exchange is a worldwide market in which one nation’s currency is converted into another nation’s currency. In further terms, exchanging of nations currency with foreign currencies. Foreign exchange happens at a specified rate which is termed the foreign exchange rate. The exchange rates are not constant continuously changing as they are derived by market forces of supply and demand. Widely used foreign currencies are the United States- dollar, Euro, Japanese Yen, British pound, and Australian dollar. US- dollar is the most denominated foreign currency. The Euro to US dollar is a widely used currency pair in the forex market as these two currencies represent the world’s enormous economy. Forex trade is simple as exchanging currencies at the bank. The main players of forex markets are the central banks, financial institutions, intermediaries, investments banks, and other banks. Central Bank is the supreme player who decides the currency value of their own nation on the forex market. Mostly foreign exchange-traded at FX market (forex market) when tourists’ visits a foreign country, import, and export happens between two countries.

Question

Dollar Peg for Hong Kong. The Hong Kong dollar (HKD) has long been pegged to the U.S. dollar (USD) at HKD7.80 = USD1.00. When the Chinese yuan (CNY) was revalued in July 2005 against the U.S. dollar from CNY8.28 = USD1.00 to CNY8.11 = USD1.00, how did the value of the Hong Kong dollar change against the yuan?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Dollar Peg for Hong Kong. The Hong Kong dollar has long been pegged to the U.S. dollar at HK$7.84/ $. When the Chinese yuan was revalued in July 2005 against the U.S. dollar from Yuan 8.24 /$ to Yuan 8.15/S, how did the value of the Hong Kong dollar change against the yuan? ..... The original HK$/Yuan cross rate was HK$ Yuan. (Round to four decimal places.)
Using the currency cross rate table, convert C$300.00 to Japanese yen. Canadian dollar U.S. dollar Euro Japanese yen British pound Australian dollar Canadian U.S. Euro Japanese British Australian dollar dollar yen pound dollar 1.5792 0.0129 2.2735 1.1601 0.0078 1.6624 0.0083 1.4355 197.1834 1.4103 0.7091 0.6332 0.8620 77.5194 128.2051 120.4819 0.4399 0.6015 0.6966 1.1012 1.4945 1.7319 C$300.00 will purchase Japanese yen. (Round to the nearest yen as needed.) 0.0051 0.0126 2.4907 0.9081 0.6691 0.5774 79.4098 0.4015
Given the information below, what is the cross-rate of the Singapore dollar in euros (i.e., Euros /Singapore dollar? Enter your answer with two decimals. Singapore dollar in US dollars (USD/SGD) 0.73 Euro in US dollars (USD/EUR) 1.26 Singapore dollar in euros (EUR/SGD) 0.65
These are currency quotes found on a foreign market: GH 4.30/$, and GH 4.55/$. ii. Which currency is depreciating in value?
You are given the following quotes: U.S. dollar/Mexican Peso = 0.2501 U.S. dollar/Australian Dollar = 0.7448 U.S dollar/Chinese Yuan = 0.1352 What is the Chinese Yuan/Australian Dollar cross rate?
Use the information below to answer the following questions. U.S. $ EQUIVALENT CURRENCY PER U.S. $ Polish Zloty .2978 3.3576 Euro 1.2198 .8198 Mexican Peso .0752 13.2988 Swiss Franc 1.0173 .9830 Chilean Peso .002071 482.80 New Zealand Dollar .8087 1.2366 Singapore Dollar .8010 1.2484 a. If you have $180, how many Polish zloty can you get? (Do not include the Polish zloty sign (Z). Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. How much is one euro worth in U.S. dollars? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.) c. If you have 5.80 million euros, how many dollars do you have? (Do not round intermediate calculations and round your answer to…
TIPS FOR READING AN EXCHANGE RATE CHART: Read down the chart. For example, in column 1 it says the US Dollar is equal to each of the currencies below it. Therefore $1 = .76 £ or $1 = .89 €. Exchange Rate Table for Month 1 US Dollar $1 = British Pound 1 £ = Chinese Yuan 1 Y = Japanese Yen 1 ¥ = Euro 1€ US Dollar --- 1.32 .16 .0088 1.13 British Pound .76 --- .12 .0067 .85 Chinese Yuan 6.37 8.46 --- .056 7.21 Japanese Yen 113.04 149.55 17.75 --- 127.55 Euro .89 1.17 .14 .0078 --- Exchange Rate Table for Month 2 US Dollar $1 = British Pound 1 £ = Chinese Yuan 1 Y = Japanese Yen 1 ¥ = Euro 1€ US Dollar --- 1.40 .20 .0080 1.17 British Pound .70 --- .11 .0065 .89 Chinese Yuan 6.20 8.72 --- .062 7.59 Japanese Yen 116.24 146.89 16.32 --- 117.2 Euro .92 1.11 .15 .0078 --- A currency depreciates (or gets…
TIPS FOR READING AN EXCHANGE RATE CHART: Read down the chart. For example, in column 1 it says the US Dollar is equal to each of the currencies below it. Therefore $1 = .76 £ or $1 = .89 €. Exchange Rate Table for Month 1 US Dollar $1 = British Pound 1 £ = Chinese Yuan 1 Y = Japanese Yen 1 ¥ = Euro 1€ US Dollar --- 1.32 .16 .0088 1.13 British Pound .76 --- .12 .0067 .85 Chinese Yuan 6.37 8.46 --- .056 7.21 Japanese Yen 113.04 149.55 17.75 --- 127.55 Euro .89 1.17 .14 .0078 --- Exchange Rate Table for Month 2 US Dollar $1 = British Pound 1 £ = Chinese Yuan 1 Y = Japanese Yen 1 ¥ = Euro 1€ US Dollar --- 1.40 .20 .0080 1.17 British Pound .70 --- .11 .0065 .89 Chinese Yuan 6.20 8.72 --- .062 7.59 Japanese Yen 116.24 146.89 16.32 --- 117.2 Euro .92 1.11 .15 .0078 --- An American family goes on vacation…
TIPS FOR READING AN EXCHANGE RATE CHART: Read down the chart. For example, in column 1 it says the US Dollar is equal to each of the currencies below it. Therefore $1 = .76 £ or $1 = .89 €. Exchange Rate Table for Month 1 US Dollar $1 = British Pound 1 £ = Chinese Yuan 1 Y = Japanese Yen 1 ¥ = Euro 1€ US Dollar --- 1.32 .16 .0088 1.13 British Pound .76 --- .12 .0067 .85 Chinese Yuan 6.37 8.46 --- .056 7.21 Japanese Yen 113.04 149.55 17.75 --- 127.55 Euro .89 1.17 .14 .0078 --- Exchange Rate Table for Month 2 US Dollar $1 = British Pound 1 £ = Chinese Yuan 1 Y = Japanese Yen 1 ¥ = Euro 1€ US Dollar --- 1.40 .20 .0080 1.17 British Pound .70 --- .11 .0065 .89 Chinese Yuan 6.20 8.72 --- .062 7.59 Japanese Yen 116.24 146.89 16.32 --- 117.2 Euro .92 1.11 .15 .0078 --- An American company contracts a…
Table 2 gives the exchange rate quotations for the U.S. dollar and the British pound. Table 2. Foreign Exchange Quotations Britain (Pound) 30-day Forward 60-day Forward 180-day Forward U.S. Dollar Equivalent Tuesday 1.3448 1.3392 1.3278 1.3128 Monday 1.3561 1.3507 1.3401 1.3260 Currency Per U.S. Dollar Tuesday Monday 0.7436 0.7374 0.7467 0.7404 0.7531 0.7462 0.7617 0.7541 (a) If you were to buy pounds for immediate delivery, what is the dollar cost of each pound on Tuesday? (b) If you were to sell dollars for immediate delivery, what is the pound cost of each dollar on Tuesday? (c) Regarding the Tuesday quotations: compared to the cost of buying 100 pounds on the spot market, if 100 pounds were bought for future delivery in 180 days the dollar cost of the pounds would be how much higher or lower (if lower, enter as a negative number)?
Cross rates: a) Indirect dollar quotes for yen and pound are 100.2468-3579 and 1.3579-654, respectively. What is the indirect yen for pound cross rate? b) Direct euro quotes for pound and Swiss franc are 1.2468-579 and 0.9876-13. What is the direct franc for pound cross rate? c) Dollar is priced at 100.2468-3579 in Tokyo. Pound is priced at 1.1111-357 in New York. What is the direct yen for pound cross rate? d) Euro is priced at 64.5982-7829 in Moscow. Pound is priced at 1.2468-579 in Frankfurt. What direct pound for ruble cross rate?
The statement “the yen rose today against the dollar from 121 to 117” will only make sense if The U.S. gains when Japan loses. These numbers measure yen per dollar, not dollars per yen. These numbers are indexes, defined relative to a base of 100. These numbers refer to time of day that the change took place. The yen is a reserve currency.