Introduction to Finance

6. 
If the U.S dollar value of a British pound is $1.95 and a euro is 
$1.55, calculate the implied value of a euro in terms of a British pound.
7. 
Assume a U.S. dollar is worth 10.38 Mexican pesos and .64 euros. 
Calculate the implied value of a Mexican peso in terms of a euro. 
8. 
Assume that fi ve years ago a euro was trading at a direct method 
quotation of $.8767. Also assume that this year the indirect method 
quotation was .8219 euros per U.S. dollar.
a. 
Calculate the euro “currency per U.S. dollar” fi ve years ago.
b. 
Calculate the “U.S. dollar equivalent” of a euro this year.
c. 
Determine the percentage change (appreciation or depreciation) of 
the U.S. dollar value of one euro between fi ve years ago and this year.
d. 
Determine the percentage change (appreciation or depreciation) 
of the euro currency per U.S. dollar between fi ve years ago and this 
year. 
9. 
Assume that last year the Australian dollar was trading at $.5527, 
the Mexican peso at $.1102, and the United Kingdom (British) pound 
was worth $1.4233. By this year, the U.S. dollar value of an Australian 
dollar was $.7056, the Mexican peso was $.0867, and the British 
pound was $1.8203. Calculate the percentage appreciation or depreci-
ation of each of these three currencies between last year and this year.
10. 
Assume that the Danish krone (DK) has a current U.S. dollar 
($US) value of $0.18.
a. 
Determine the number of DK that can be purchased with one 
U.S. dollar.
b. 
Calculate the percentage change (appreciation or depreciation) 
in the Danish krone if it falls to $0.16.
c. 
Calculate the percentage change (appreciation or depreciation) 
in the U.S. dollar if the DK falls to $0.16.
11. 
Assume the U.S. dollar value of the Australian dollar is $0.73 
while the U.S. dollar value of the Hong Kong dollar is $0.13.