2. In 2015 one barrel of Brent oil traded for GBP 42.5 and South Africa rands (ZAR) 790. What is theexchange rate between the pound and the rand? How would the exchange rate change if the oilprice jumps to GBP 50/barrel (assume no change in the price in S. Africa)? .... Or if expressed as FRF/GBP2. In 2015 one barrel of Brent oil traded for GBP 42.5 and South Africa rands (ZAR) 790. What is theexchange rate between the pound and the rand? How would the exchange rate change if the oilprice jumps to GBP 50/barrel (assume no change in the price in S. Africa)?AssumptionsPrice of an ounce of gold in GBP (£/barrel)Price of an ounce of gold in S. African rands(ZAR/barrel)What is the implied £/ZAR exchange rate?(GBP price of an ounce / ZAR price of an ounce)Brent OilValues£42.50ZAR 790.00What If£50.00ZAR 790.00 .... Or if expressed as FRF/GBP2. In 2015 one barrel of Brent oil traded for GBP 42.5 and South Africa rands (ZAR) 790. What is theexchange rate between the pound and the rand? How would the exchange rate change if the oilprice jumps to GBP 50/barrel (assume no change in the price in S. Africa)?AssumptionsPrice of an ounce of gold in GBP (£/barrel)Price of an ounce of gold in S. African rands(ZAR/barrel)What is the implied £/ZAR exchange rate?(GBP price of an ounce / ZAR price of an ounce)Brent OilValues£42.50ZAR 790.00What If£50.00ZAR 790.00

Exchange Rate: Exchange rates are the cost of one currency when compared to another. Either fixed or…

In 2015 one barrel of Brent oil traded for GBP 42.5 and South Africa rands (ZAR) 790. What is the exchange rate between the pound and the rand? How would the exchange rate change if the oil price jumps to GBP 50/barrel (assume no change in the price in S. Africa)?

In 2015 one barrel of Brent oil traded for GBP 42.5 and South Africa rands (ZAR) 790. What is the exchange rate between the pound and the rand? How would the exchange rate change if the oil price jumps to GBP 50/barrel (assume no change in the price in S. Africa)?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter29: International Finance

Section: Chapter Questions

Problem 8P

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Question

2. In 2015 one barrel of Brent oil traded for GBP 42.5 and South Africa rands (ZAR) 790. What is the
exchange rate between the pound and the rand? How would the exchange rate change if the oil
price jumps to GBP 50/barrel (assume no change in the price in S. Africa)?

.... Or if expressed as FRF/GBP
2. In 2015 one barrel of Brent oil traded for GBP 42.5 and South Africa rands (ZAR) 790. What is the
exchange rate between the pound and the rand? How would the exchange rate change if the oil
price jumps to GBP 50/barrel (assume no change in the price in S. Africa)?
Assumptions
Price of an ounce of gold in GBP (£/barrel)
Price of an ounce of gold in S. African rands
(ZAR/barrel)
What is the implied £/ZAR exchange rate?
(GBP price of an ounce / ZAR price of an ounce)
Brent Oil
Values
£42.50
ZAR 790.00
What If
£50.00
ZAR 790.00

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