Assignment:
Problem 1) Some people are arguing that the Chinese Yuan Renminbi (CNY) could take over the US dollar and the Renminbi will become the next reserve currency. Please read the following articles:
Frankel, J. (2011). The rise of the Renminbi as international currency: Historical precedents.
US Department of Treasury (2012). Renminbi as the next reserve currency: Potential, challenges, and implications.
Oliver, C. (2012). China's Yuan set for more international role.
Based on your analysis and findings, will Renminbi replace the US Dollar as the world's most popular currencies to hold? Will Renminbi become the next reserve currency? Why? Please explain your reasoning.
Problem 2) Is the exchange rate of the Mexican Peso (one of the emerging market currencies) determined in a fixed or in a floating exchange rate system? Please explain your reasoning.
Problem 3) Is the exchange rate of the Indian Rupee (one of the emerging market currencies) determined in a fixed or in a floating exchange rate system? Please explain your reasoning.
Problem 4) To what extent is the Emerging Market (EM) Currency trading risky? Please explain your reasoning.
Problem 5) Based on your analysis and findings, what would you recommend to international market currency investors?