CFA Level I · CFA Level I Exam · Exchange Rate Calculations
The USD/JPY rate (JPY per 1 USD) moves from 150.00 to 135.00. The percentage change in the value of the yen relative to the US dollar is closest to:
The yen appreciated about 11.1% against the dollar. Because the yen is the price currency in the JPY-per-USD quote, its change is the old rate divided by the new rate minus one: 150/135 - 1 = 11.1%. The dollar fell 10.0%.
- A-10.0%
- B+10.0%
- C+11.1%Correct
Explanation
The yen is the price currency, so its value change equals the inverse: (1/135)/(1/150) - 1 = 150/135 - 1 = +11.1%. The option of -10.0% is the change in the dollar value (135/150 - 1). The option of +10.0% takes the absolute dollar change as if it were the yen change.
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