If the US$ strengthens by 2% relative to the euro (US$1.00 = €0.69986), what will be the new value for the euro per US$1.00?

Question

Quizplus · Accepted Answer

If the US dollar strengthens by 2% relative to the euro, it means that you need fewer dollars to buy the same amount of euros. The original value is €0.69986 per US$1.00. To find the new value, you decrease this amount by 2%. This can be calculated as €0.69986 * (1 - 0.02) = €0.6858662, which rounds to approximately €0.686 per US$1.00, but since this specific value isn't an option and the question seems to have a mistake in the presentation of choices and calculation, the correct approach to find the new value involves understanding the concept of strengthening currency. However, without the exact calculation leading to the provided options, it's challenging to directly match the explanation to the given choices. The explanation provided is based on the correct understanding of how currency value changes when one strengthens relative to another, but there seems to be a discrepancy in the calculation or choice presentation.

If the US$ Strengthens by 2% Relative to the Euro