Exchange rates-valuation from interest rates-inflation rate

Assignment Help Business Economics

Reference no: EM131096226

Exchange rates, in simple terms, is the valuation of 1 currency in relation to a second currency. As many of you have stated, various factors play into this valuation from interest rates, inflation rates, expectations (economic growth, consumer spending, national deficits, monetary policies, etc), political stability, etc. A by-product of this is cross rates, which usually arises because the currency in question is not often traded, so no quotes are maintained and is, therefore, a derivative calculation of currencies it trades with. In general, a falling rate (value) of a currency is bad news because its purchasing powers declines and it means that confidence has been lost. Conversely, it could mean that confidence in the opposing currency has improved. Can you please expound?

Reference no: EM131096226

Questions Cloud

Index of incremental investment up to chilled water system : A mechanical engineer must recommend an A/C system to a commercial building owner. The owner intends to own the building for at least 10 years. A chilled water system has a design life of 10 years, an initial cost of $60,000, and annual operating cos..

Brief summary regarding treatment options for the case study : Need a brief summary regarding treatment options for the case study described.

Individual and market demand curve for privet drive : Now consider the market for Harry Potter books in Privet Drive where there are two types of consumers. The first type love Harry Potter books and have an inverse demand curve of P = 10 - 0.5Q. The second type are fanatics and have an inverse deman..

Define a token class almost reserved : Define a token class Almost Reserved to be those identifiers that are not reserved words but that would be if a single character were changed. Why is it useful to know that an identifier is "almost" a reserved word?

Exchange rates-valuation from interest rates-inflation rate : Exchange rates, in simple terms, is the valuation of 1 currency in relation to a second currency. As many of you have stated, various factors play into this valuation from interest rates, inflation rates, expectations (economic growth, consumer spend..

Equation for the market demand for harry potter : (a) What is the equation for the market demand for Harry Potter books if all consumers have the same equation for demand as Laurel? (b) What is the price elasticity of the market demand for Harry Potter at P = 12.5? Compare it to Laurel's price e..

Estimate the rate of corrosion in ipy and mm per year : Estimate the rate of corrosion in ipy and mm per year.

Discuss statement using consumer theory : A welfare system in which benefits take the form of cash payments to recipients is preferable to one based on the use of price subsidies on merit goods. Discuss this statement using consumer theory to illustrate your arguments.

DOT is performing benefit-cost analysis of new highway : A DOT is performing a benefit-cost analysis of a new highway using an analysis period of 40 years as part the required environmental impact assessment of the project. The section of highway is estimated to have a construction cost $260 million dollar..

User Account

All Pages