Page 38 - FINAL CFA SLIDES DECEMBER 2018 DAY 6
P. 38
Session Unit 5:
20. Currency Exchange Rates
LOS 20.c: Calculate and interpret the percentage change in a currency relative to another
currency., p.159
% appreciation is not 1.42 USD/EUR to 1.39 USD/EUR = -2.11% (1.39/1.42 – 1)
same as % depreciation! EUR Depreciation against USD
Does this mean USD has appreciated by 2.11%?
These are direct quotes for EU, lets do direct for US citizen!
1/1.42 USD/EUR to 1/1.39 USD/EUR = 0.7194/0.7042 – 1 = 0.0216 =
2.16% USD Appreciation!
LOS 20.d: Calculate and interpret currency cross-rates, p.159
The cross rate is the exchange rate between two currencies implied by their exchange rates
with a common third currency.
Example: Cross rate calculation, p.160: So CHF/USD = 1.7799, and So NZD/USD = 2.2529. Calculate the
CHF/NZD spot rate.
