Arithmetic Mean and Exchange Rate Effect
Chapter 3, Problem 3 Using published sources (for example, The Wall Street Journal, Barron's, Federal Reserve
Bulletin), look up the exchange rate for U. S. dollars with Japanese yen for each of the past 10 years (you can use an average for the year or a specific time period each year).
Japanese Yen to U. S. Dollar (Retrieved from http://research.stlouisfed.org/fred2/data/EXJPUS.txt ) Date Example - Japan Stock Price in Yen Example - Japan Stock Price in $ 1-Apr-13 97.7582 5000 $51.15 1-Apr-12 81.2524 5000 $61.54 1-Apr-11 83.1771 5000 $60.11 1-Apr-10 93.4527 5000 $53.50 1-Apr-09 98.9200 5000 $50.55 1-Apr-08 102.6777 5000 $48.70 1-Apr-07 118.9324 5000 $42.04 1-Apr-06 117.0695 5000 $42.71 1-Apr-05 107.1938 5000 $46.64 1-Apr-04 107.6564 5000 $46.44 Based on these exchange rates, compute and discuss the yearly exchange rate effect on an investment in Japanese stocks by a U. S. investor.
Till 2007 The Japanese Yen is going at discount, after 2007 the Japanese Yen rate is preium over U.S.Dollar. The U. S. dollar versus the Japanese yen exchange rate refers to how man yen one dollar will buy. An increase in the rate indicates a strengthening U. S. dollar, and a decrease in the rate indicates a weakening of the U. S. dollar versus the yen.
A strong dollar will buy more unites of a foreign currency than previously. A weak dollar will buy less. One result of a stronger dollar is that the prices of foreign goods and services drops for U. S. consumers. Discuss the impact of this exchange rate effect on the risk of Japanese stocks for a U. S. investor? For Investors is better to invest after 2007 because it will cost less Japanese Yen for getting U.S Dollar.
Always
Bulletin), look up the exchange rate for U. S. dollars with Japanese yen for each of the past 10 years (you can use an average for the year or a specific time period each year).
Japanese Yen to U. S. Dollar (Retrieved from http://research.stlouisfed.org/fred2/data/EXJPUS.txt ) Date Example - Japan Stock Price in Yen Example - Japan Stock Price in $ 1-Apr-13 97.7582 5000 $51.15 1-Apr-12 81.2524 5000 $61.54 1-Apr-11 83.1771 5000 $60.11 1-Apr-10 93.4527 5000 $53.50 1-Apr-09 98.9200 5000 $50.55 1-Apr-08 102.6777 5000 $48.70 1-Apr-07 118.9324 5000 $42.04 1-Apr-06 117.0695 5000 $42.71 1-Apr-05 107.1938 5000 $46.64 1-Apr-04 107.6564 5000 $46.44 Based on these exchange rates, compute and discuss the yearly exchange rate effect on an investment in Japanese stocks by a U. S. investor.
Till 2007 The Japanese Yen is going at discount, after 2007 the Japanese Yen rate is preium over U.S.Dollar. The U. S. dollar versus the Japanese yen exchange rate refers to how man yen one dollar will buy. An increase in the rate indicates a strengthening U. S. dollar, and a decrease in the rate indicates a weakening of the U. S. dollar versus the yen.
A strong dollar will buy more unites of a foreign currency than previously. A weak dollar will buy less. One result of a stronger dollar is that the prices of foreign goods and services drops for U. S. consumers. Discuss the impact of this exchange rate effect on the risk of Japanese stocks for a U. S. investor? For Investors is better to invest after 2007 because it will cost less Japanese Yen for getting U.S Dollar.
Always