Lesson correlates with National Business Education Association National Standards for Business Education, 1995, Reston, Virginia.
· · Standard V.  Finance ... Achievement Standard:  Explain the role, importance, and concepts of international finance and risk management.
 A.  Currency and Exchange
· Level 3 (Secondary) - Performance Expectations:  Distinguish between currencies (e.g., hard vs. soft, convertible vs. non-convertible).
Currency ... Who?  What?  Where?

 
TIME REQUIRED:
60 minutes
 
RECOMMENDED GRADE:
Grades 9-12


 
MAJOR CONCEPTS:
 Calculate currency values based upon exchange rates
 
INSTRUCTIONAL OBJECTIVES:
 Students will:
· identify factors that affect the value of currency; and,
· calculate foreign exchange rates of various currencies.

Key Terms:
convertible
currency futures
exchange controls
exchange rate
floating exchange rates
foreign exchange
foreign exchange market
hard currency
interest rate
money
non-convertible
soft currency
 
MATERIALS:
· One copy of Handouts #1, #2, and #3 for each student.
 
RATIONALE:
 While there are deliberations on developing a single currency in the European Union, there are currently various types of monetary units in use by each European country.  Students need to have an understanding on how to calculate with exchange rates in order to purchase merchandise and conduct business in a foreign country.
 
PROCEDURE:
 1. Develop a glossary of terms for the key terms above.
2. Discuss the types of currencies in use around the world.
3. Examine the function of an exchange rate.  Distribute Handout #1.
4. Discuss the exchange rate conversion formula (Handout #1).
5. Complete Handout #1, calculating exchange rates for various countries.
6. Complete Handout #2, analyzing the cost of purchasing goods in a foreign country compared to the same product in the United States.
 
EVALUATION: Close the lesson by discussing the effect of the exchange rate on the traveling society.  Complete Handout #3, researching current exchange rates and monetary symbols, and recalculating the U.S. dollar equivalent.Have each student research the monetary units and exchange rate for a foreign country for a two to three year period (books, banks, on-line).Graph the recent value of the currency in relation to two other major currencies (for example, U.S. dollar, Japanese yen, British pound, deutsche mark, Swiss franc).
 
AUTHOR:
  Gary Schepf, Nimitz High School, Irving, TX.
EDITORS:
Les Dlabay, Lake Forrest College, Wildwood, IL.
Robert Ristau, Eastern Michigan University (ret.), Ypsilanti, MI.

 
 
 
 
 

Click here to download Microsoft Word version of the plan including handouts.