Effects of appreciation.?

Question

On 2003 to 2004 the Canadian dollar appreciated against the US dollar. Explain the effect of this appreciation on :

i) retired Canadians who live in Arizona and Florida during the winter months.

Answer 1

Appreciation is a term used in accounting relating to the increase in value of an asset. In this sense it is the reverse of depreciation, which measures the fall in value of assets over their normal life-time.

Appreciation is a rise of a currency in a floating exchange rate.

In times of high inflation, appreciation will be common to all balance sheet assets. Generally, the term is reserved for property or, more specifically, land and buildings. In any viable modern economy, such property tends to increase in value over the years - if only because of the scarcity of usable land forces its price in a competitive situation. However, this belief has often caused speculative bubbles to arise.

There are considerable difficulties in assessing the increase in value of any particular asset. This is principally because of the variety of interpretations that can be attached to the word value itself and due to the various instruments and methods used in the valuation process.

For exact details of appreciation effects in 2003 - 2004...

I recommend you to see the PDF file in this link...It clearly shows a graph in second page...

http://www.bankofcanada.ca/en/bos/2005/w...

Answer 2

It depends upon their retirement plan. Canadian pension, domestic investments, foreign investments.