HW1 Assignment – Ch 1,2,3
FIN465 – Spring 2016

Instructor: Dr. Blaise Roncagli

Before attempting this assignment, be sure to read the handout “Exchange Rate Concepts Study Guide” which your instructor has made available to you on the Blackboard course shell for this class. This handout describes some concepts and notation that will be essential to this assignment. You should also download the document “ISO 4217 Currency Codes from XE” from the Blackboard shell to use as a reference to the three-character currency codes used throughout this assignment.

To obtain data on current and historical exchange rates, go to www.xe.com .
To create an historical chart of exchange rate movement over time, go to www.xe.com, select ToolsCurrency Charts, pick your “from” currency (usually USD), your “to” currency, and your time frame under the “View” drop down, then press GO to produce your chart.

Note the use of “currency pairs” notation below as described in the Exchange Rate Concepts Study Guide. Be sure you understand that notation or you will not answer the questions below correctly.

Problem 1-1
a) Go to www.xe.com to produce an exchange rate chart for US dollars per British Pound (GBP/USD) for the past 1 year. Answer the following questions from that graph. Express your answers in direct format, to at least 4 decimal places.
What was the GBP/USD exchange rate on 2 July 2014?
What was the GBP/USD exchange rate on 26 November 2014?
Did the GBP appreciate or depreciate during that period, and by what percentage?

b) Look at the 10 year chart for GBP/USD. Did the GBP appreciate, depreciate, or stay the same against the USD during the financial crisis of 2008?

c) Produce the 1 year chart for the US dollar per Canadian dollar (CAD/USD) exchange rate. Answer the following questions from that graph. Express your answers in direct format,