Exchange Rates Assignment

1. Given the following exchange rates, convert the value for the initial currency into the value for the second currency. Do all calculations in a spreadsheet.
   1 USD = 0.5116 GBP
   108 JPY = 1 USD
   1 USD = 3.04 ARS(Argentine Peso)
   1 EUR = 24 CZK (Czech Koruna)
   1 EUR = 1.56 USD
   
   
   1. 500 USD = ______ JPY
   2. 70,000 JPY = ______ USD
   3. 6,000 ARS = ______ JPY
   4. 50 GBP = ______ EUR
   5. 500 CZK = ______ GBP
   
   
2. Compute the values for exercise 1 under the condition that you will have to pay a 1.5 percent commission for each exchange rate transaction between any two currencies.
   
3. Choose three major currencies (one can be the USD), but coordinate with the other students so that each person chooses different currencies. Look up the exchange rates for the last month (by day). Create charts to show the change over time.
   
4. Find ten years of monthly average exchange rate data between two countries (try www.bank-banque-canada.ca or www.oanda.com/convert/fxaverage). Find interest rates for the two countries (try IFS or other governmental sources).
   
   1. Plot the exchange rate and the interest rates.
   2. For each month in your data, let e0 be the current exchange rate (foreign/domestic), and e1 be the exchange rate one-year in the future. If rd is the domestic interest rate, and rf the foreign exchange rate, compute the two values: e0/e1 and (1+rd)/(1+rf). Draw a chart comparing these two values over time.