United States Dollar and Exchange Rate
Chapter 14
Question 1: What distinguishes the mortgage markets from other capital markets?
- The mortgage market is seured by real estate.
- Mortgage interests are relatively low
- Features of the mortgage are designed to reduce the likelihood of default
- The borrower differs most commonly mortgage is households for cap markets is government or businesses
- Mortgage has different amounts and maturities so no secondary market has been developed.
Question 8: Lenders tend not to be as flexible about the qualifications required of mortgage customers as they can be for other types of bank loans. Why is this so?
Most lenders sell the mortgage loan to one of the few federal agencies in the secondary mortgage market. The agencies have very precise guidelines that have to be followed before they accept the loan.
Web Exercise 1: $260.000
Chapter 15
Quantitative problem 12: The current exchange rate between the Japanese yen and the U.S. dollar is 120 yen per dollar. If the dollar is expected to depreciate by 10% relative o the yen, what is the new expected exchange rate?
Rate is 120 yen – 1 dollar
If dollar depreciates 10% then the new exchange rate will be 108 yen – 1 dollar
Web Exercise 1:
a) What is the percentage change in the euro-dollar exchange rate been between the euro’s introduction and now?
In December 1999, the exchange rate was approximately .85 dollars per euro. As of today, the exchange rate is .75 dollars per euro. The dollar has depreciated 10% in comparison to the euro’s price since the euro was implemented (not mentioning there was a time where the dollar was valued above the euro in 2001)
b) What has been the annual percentage change in the euro-dollar exchange rate for each year since the euro’s introduction?
Year Dollar vs Euro Change
2012 0.7781 8%
2011 0.7188 -5%
2010 0.7546 5%
2009 0.719 5%
2008 0.6832 -6%
2007 0.7306 -8%
2006 0.7968 -1%
2005 0.8043 0%
Question 1: What distinguishes the mortgage markets from other capital markets?
- The mortgage market is seured by real estate.
- Mortgage interests are relatively low
- Features of the mortgage are designed to reduce the likelihood of default
- The borrower differs most commonly mortgage is households for cap markets is government or businesses
- Mortgage has different amounts and maturities so no secondary market has been developed.
Question 8: Lenders tend not to be as flexible about the qualifications required of mortgage customers as they can be for other types of bank loans. Why is this so?
Most lenders sell the mortgage loan to one of the few federal agencies in the secondary mortgage market. The agencies have very precise guidelines that have to be followed before they accept the loan.
Web Exercise 1: $260.000
Chapter 15
Quantitative problem 12: The current exchange rate between the Japanese yen and the U.S. dollar is 120 yen per dollar. If the dollar is expected to depreciate by 10% relative o the yen, what is the new expected exchange rate?
Rate is 120 yen – 1 dollar
If dollar depreciates 10% then the new exchange rate will be 108 yen – 1 dollar
Web Exercise 1:
a) What is the percentage change in the euro-dollar exchange rate been between the euro’s introduction and now?
In December 1999, the exchange rate was approximately .85 dollars per euro. As of today, the exchange rate is .75 dollars per euro. The dollar has depreciated 10% in comparison to the euro’s price since the euro was implemented (not mentioning there was a time where the dollar was valued above the euro in 2001)
b) What has been the annual percentage change in the euro-dollar exchange rate for each year since the euro’s introduction?
Year Dollar vs Euro Change
2012 0.7781 8%
2011 0.7188 -5%
2010 0.7546 5%
2009 0.719 5%
2008 0.6832 -6%
2007 0.7306 -8%
2006 0.7968 -1%
2005 0.8043 0%