Foreign Exchange

Foreign Exchange

1. 1. Foreign Exchange
2. 2. Riyals for candy…Riyals for candy…
3. 3. 1. What was a1. What was a “Buck” worth“Buck” worth in this simulation?in this simulation? -One Candy Bar-One Candy Bar
4. 4. 2. What was a2. What was a “Riyal” worth?“Riyal” worth? - A fraction of a- A fraction of a“Buck.”“Buck.”
5. 5. 3. How could we best express the3. How could we best express the relationship ofrelationship of “Riyals” to “Bucks”?“Riyals” to “Bucks”? - Lets look at our chart.- Lets look at our chart.
6. 6. 4. How was the value of “Riyals” to “Bucks” determined in round #1? - Supply/demand. - Competition. - Market interaction. -*International exchange rates are determined the same way.
7. 7. 5. What happened to the value of the “Riyal” relative to “Buck” in rounds 2 and 3? - Value decreased = it took more “Riyals” to obtain a“Buck.”
8. 8. 6. Did the “Buck” gain in value? NO, throughout the simulation a “Buck” was worth one candy bar. =
9. 9. Calculating Foreign Exchange Amount in Foreign Currency Current Exchange Rate = Amount in U.S. Dollars
10. 10. Child number 2 and 3 were sent to a boarding school in the Philippines …… Its currency is the Philippine Peso. Their Exchange Rate = 44.60 350 Pesos 44.60 = $7.85 Current Exchange Rates http://www.exchangerate.com/ Did Ms. Duke make a good choice?
11. 11. Strong Dollar Imports Exports
12. 12. Weak Dollar Imports Exports
13. 13. Why would small countries want a depreciated dollar on the U.S. dollar? Why is the world upset at China?
14. 14. So where should senior trip be? France? England? How about Sri Lanka! 1 Dollar = 104 Rupees