Exchange Rate Determination

by / On July 8, 2022 / In Business and Management, MLA

Just one question needs to be answered! I did the math for it, I just need you to analyze the result in 1 in both ways. Everything is below.

Question:

One US $ buys 50 West African francs, now. In one year, it buys 80 W. African francs. Derive the percentage change as W. African francs and US $, as well as US dollars per W. African francs.

Computing the percent in USD
= (80-50)/50
=30/50
= 0.6
The premium is 60%

Computing the percent in Western African Francs
= (0.0125 0.02) / 0.02
    = (-0.0075)/0.02
    = -0.375
    The discount is at -37.5%

(This needs to be answered)
Analyze the result of 1in both ways.