The Yen Rises from $0

question 1

Multiple Choice

The yen rises from $0.0080/¥ to $0.0100/¥. Stated in continuously compounded returns, what percentage change is this in the value of the dollar?

• A) -22.3%
• B) -20%
• C) +20%
• D) +22.3%
• E) cannot be determined from the information given

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Definitions:

Ad Valorem

A term describing taxes or duties calculated as a percentage of the value of goods or property.

Quota

A government-imposed trade restriction that limits the number or monetary value of goods that can be imported or exported during a specified time frame.

Protective Tariffs

Taxes imposed on imported goods to protect domestic industries from foreign competition by making imported goods more expensive.