Country X trades with only two countries, Nigeria and Malaysia.
80% of Country X’s trade is with Nigeria and 20% is with Malaysia.
The original value of the trade-weighted exchange rate index is 100.
The value of Country X’s currency against the Nigerian Naira rises by 10%. The value of Country X’s currency against the Malaysian Ringgit rises by 50%.
What will be the value of Country X’s new trade-weighted exchange rate index?
1 )
115
118
3 )
130
4 )
160
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