Exchange Rates - Fixed & Floating
By Oluremilekun Ojo
Introduction
We know why we exchange currencies. o To sell exports and buy imports o - To invest in other country’s stocks and bonds o - To build factories or stores in other markets o - To hold currencies in bank accounts for future exports, imports, and business loans. o - To speculate on currency values o - To control excessive imbalances This application will further explain two types of exchange rates o Fixed and o Floating
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Overview
The menu provides you with ways to understand the fixed and floating rates concept. You will be required to answer questions on both sides so that you can work with the case study
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Menu
Floating Fixed Click here to know about floating rates Click here to know about fixed rates
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Final Review
Floating/flexible rate Information
Mechanics o The value of the dollar depreciates or appreciates depending on the movement in demand and supply of the dollar. o The international supply of the US dollar comes from US citizens, banks, and industry wanting to purchase foreign goods, investment, assets, and to make transfer payments to foreigners. o The international demand of the US dollar comes from foreigners, banks, and industry wanting to purchase our goods, investments, assets, and to make transfer payments to us. o Changes in Exchange Rates: o Dollar Appreciation (increase in value against another currency) o An increase in Demand of the US dollar or o A decrease in the Supply of the US dollar o (Insert Diagram 1 and 2) o Dollar Depreciation (a decrease in the value against another currency) o A decrease in the demand for the US dollar, or o An increase in the Supply of the US dollar o (Insert Diagram 3 and 4)
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Flexible Rate Question A1
o Flexible question A1 o Why is kata kitty here and there o o o o A patiati patata B oata tuttyt C catiti catiti D puti puti
A
B
C
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D
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Flexible Feedback A1 - A
o Bla bla bla o You are right because bla bla bla
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Flexible Rate Question B1
o Fixed question A2 o Why is kata kitty here and there o o o o A patiati patata B oata tuttyt C luti luti D ndi ndi
A
B
C
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D
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Flexible Feedback B1- B
o Bla bla bla o You are right because bla bla bla
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Flexible Rate Question C1
o Fixed question B1 o Why is kata kitty here and there o o o o
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B
A patiati patata B oata tuttyt C coti woti D doti doti
C
D
Flexible Feedback C1 - C
o Bla bla bla o You are right because bla bla bla
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Flexible rate feedback
o This is not the right answer because ---------------
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Flexible Rate Case Study summary
o This will be a case study which will also summarize information about flexible or floating rates
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Final Review – Fixed & Flexible rates
Is this right or wrong o Right o Wrong Is this right or wrong o Right o Wrong
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