Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
16Activity
0 of .
Results for:
No results containing your search query
P. 1
Foreign Exchange

Foreign Exchange

Ratings: (0)|Views: 176|Likes:
Published by anshpaul

More info:

Categories:Types, Business/Law
Published by: anshpaul on Dec 01, 2009
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PPT, PDF, TXT or read online from Scribd
See more
See less

09/17/2010

pdf

text

original

 
 
Slide 13-1
 
Copyright © 2003 Pearson Education, Inc.
Introduction
Exchange rates are important because they enable usto translate different counties’ prices into comparableterms.
Exchange rates are determined in the same way asother asset prices.
The general goal of this chapter is to show:
How exchange rates are determined
The role of exchange rates in international trade
 
 
Slide 13-2
 
Copyright © 2003 Pearson Education, Inc.
Domestic and Foreign Prices
If we know the exchange rate between two countries’currencies, we can compute the price of one country’sexports in terms of the other country’s money.
 – Example: The dollar price of a £50 sweater with a dollar exchange rate of $1.50 per pound is (1.50 $/£)
x
(£50) =$75.
Exchange Rates andInternational Transactions
 
 
Slide 13-3
 
Copyright © 2003 Pearson Education, Inc.
Two types of changes in exchange rates:
 – 
Depreciation of home country’s currency
 – A rise in the home currency prices of a foreign currency – It makes home goods cheaper for foreigners and foreign goodsmore expensive for domestic residents.
 – 
Appreciation of home country’s currency
 – A fall in the home price of a foreign currency – It makes home goods more expensive for foreigners andforeign goods cheaper for domestic residents.
Exchange Rates andInternational Transactions

Activity (16)

You've already reviewed this. Edit your review.
1 hundred reads
Imran Hossain liked this
dipeshk liked this
sakil khan liked this
cookinstyl liked this
trupthi2007 liked this
pankaj_scrib liked this
devnani123 liked this
wilsonumpu liked this
taiyegbusi liked this

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->