Market information on the internet. Use your own institution's currency database or visit http:// www.oanda.com/convert/fxhistory, to obtain exchange rate data covering at least one year, copy and paste the results into Excel and answer the following questions:

a. Determine the cross exchange rate between the Japanese yen and the Australian dollar. Compare the cross exchange rate with the direct rate. Are there any differences? Evaluate the significance of your results.

b. Select a pattern, for example two days of consecutive falls, then select and check the move- ments on the following day (the third day in this case). Are the following day movements unusual in any way? Evaluate the significance of your results.

It is helpful to use nested ‘if' instructions in Excel. In this example two days of consecutive falls is the criteria for selecting the third day's price movement. An instruction placed in C4 and copied and pasted to C365 with exchange rates from B1 to B365 would be: ¼IF(B3>B2, IF(B2>B1, B4,‘‘ ''),‘‘ '') a run of three days would be: ¼IF(B4>B3,IF(B3>B2,IF(B2>B1,B5,‘‘ ''),‘‘ ''),‘‘ '') note that ‘‘ ''; is simply a double inverted comma, Excel ignores gaps so ‘‘ '' will also work. Once applied, choose ‘Data' and ‘sort' from the toolbar to get rid of the blanks.

Note that the Excel formula can be varied so that for instance < may="" be="" used="" and="" other="" operands="">¼, þ, - and so on. Formulas may also be incorporated so that if only large movements were of interest one could write:

¼IF(B4>B3*1.1,IF(B3>B2*1.1,IF(B2>B1*1.1,- B5,‘‘''),‘‘ ''),‘‘ '')

Experiment with the formula to obtain the desired pattern.