For this project, you will need to obtain and analyze exchange rate data. Pick two
currencies (not the U.S. Dollar).
Data & Analysis
After selecting two currencies, gather data from www.xe.com/currencytables (or search
for “historical exchange rates” in your browser). Obtain the direct exchange rate of
Currency #1 for the beginning of each of the last 12 months. Insert this information into
a column on an Excel spreadsheet. Repeat the process to obtain the direct exchange
rate of Currency #2. Compute the percentage change in the value of Currency #1 and
Currency #2 (i.e., from month to month). Determine the standard deviation of the
movements (percentage changes) in Currency #1 and Currency #2.
Written Explanations
There is no page requirement for this portion. You may only need one or two pages.
Just be thoughtful in your responses. Please answer the following questions:
1. Have Currency #1 and Currency #2 strengthened or weakened against the U.S.
Dollar over the last 12 months?
2. Does it appear that Currency #1 moves in the same direction relative to the U.S.
Dollar? Does it appear that Currency #2 moves in the same direction relative
the U.S. Dollar? Explain.
3. Compare the standard deviation of the Currency #1’s movements to the standard
deviation of the Currency #2’movements. Which currency is more volatile? Why
do you think this is?
Data Visualization
Plot the exchange rates for Currency #1 and Currency #2 for the 12-month period.
Clearly label the x and y axes and provide a relevant title for the figure. You may use
any program to create the figure.
To be sure, you will need to upload three separate files for this project.