These are original Marlbridge practice questions, not past exam questions. They use three fictional countries: Valdoria (currency the valda, VD), Kestria (the kesta, KS) and, in Question 7, Norvia (the norra, NR). All rates and prices are fictional. The rubrics are a suggested Marlbridge rubric to help you check your work; they are not an official scoring guideline. Assumptions: no fees or buy–sell spreads; home-currency prices of goods do not change unless stated; a four-function calculator is enough.
Question 1 (multiple choice · foundation)
The exchange rate is 1 VD = 8 KS. What is the price of one kesta in valdas?
- (A) VD 8
- (B) KS 0.125
- (C) VD 0.80
- (D) VD 0.125
Answer and explanation
Answer: (D). VD per KS = 1 ÷ (KS per VD) = 1 ÷ 8 = 0.125.
- (A) repeats the price of a valda in kestas instead of taking the reciprocal.
- (B) has the right number but the wrong currency. The price of a kesta must be stated in valdas; a kesta priced in kestas is always 1.
- (C) confuses one-eighth with eight-tenths. 8 kestas for 1 valda means a kesta is worth 1 ÷ 8 = 0.125 of a valda, not 0.8.
Question 2 (multiple choice · core)
The exchange rate changes from 1 VD = 6 KS to 1 VD = 5 KS. Which statement is correct?
- (A) The valda appreciated and the kesta depreciated.
- (B) The valda depreciated and the kesta appreciated.
- (C) Both currencies depreciated, because the number fell.
- (D) Neither currency changed in value; only the way the rate is quoted changed.
Answer and explanation
Answer: (B). One valda now buys only 5 kestas instead of 6, so the valda is worth less: it depreciated. The kesta’s price in valdas rose from 1 ÷ 6 ≈ 0.1667 to 1 ÷ 5 = 0.20, so the kesta appreciated.
- (A) reverses the result. A valda that buys fewer kestas has lost value.
- (C) is impossible: against each other, one currency’s depreciation is the other’s appreciation.
- (D) confuses a change in the rate with a change in quoting. Both rates are quoted the same way (KS per VD), and the number changed.
Question 3 (multiple choice · core)
A Kestrian coffee machine costs KS 900. The exchange rate is 1 VD = 4.5 KS. What does the machine cost a Valdorian buyer in valdas?
- (A) VD 200
- (B) VD 900
- (C) VD 4,050
- (D) VD 0.005
Answer and explanation
Answer: (A). VD price = KS 900 ÷ 4.5 KS per VD = VD 200. Unit check: KS ÷ (KS per VD) = VD.
- (B) forgets to convert: it uses the kesta price as if it were in valdas.
- (C) multiplies instead of dividing: 900 × 4.5. The units would be KS² per VD, which is meaningless.
- (D) divides the wrong way round: 4.5 ÷ 900.
Question 4 (multiple choice · core)
The rate moves from 1 VD = 4 KS to 1 VD = 5 KS. Which statement about the percentage changes is correct?
- (A) The valda appreciated by 25% and the kesta depreciated by 25%.
- (B) The valda appreciated by 25% and the kesta depreciated by 20%.
- (C) The valda appreciated by 20% and the kesta depreciated by 25%.
- (D) The valda depreciated by 25% and the kesta appreciated by 20%.
Answer and explanation
Answer: (B). Valda: (5 − 4) ÷ 4 × 100 = +25%. Kesta: its price falls from 1 ÷ 4 = VD 0.25 to 1 ÷ 5 = VD 0.20, so (0.20 − 0.25) ÷ 0.25 × 100 = −20%.
- (A) flips the sign of the valda’s change instead of using the kesta’s own price.
- (C) swaps the two percentages: the 20% uses the wrong base for the valda.
- (D) gets the direction wrong: a valda that buys more kestas has appreciated.
Question 5 (calculation · core)
A Valdorian student pays university fees of KS 36,000 a year in Kestria. The fee in kestas does not change. When she enrols, 1 VD = 4.8 KS. A year later, 1 VD = 4.5 KS.
(a) Calculate the fee in valdas in each year. (b) Calculate the percentage change in the valda cost of the fee. (c) State which currency appreciated, and calculate the percentage change in the value of the valda and of the kesta.
Worked solution
(a) Year 1: 36,000 ÷ 4.8 = VD 7,500. Year 2: 36,000 ÷ 4.5 = VD 8,000.
(b) (8,000 − 7,500) ÷ 7,500 × 100 = +6.67%.
(c) One valda buys fewer kestas (4.5 instead of 4.8), so the kesta appreciated and the valda depreciated. Valda: (4.5 − 4.8) ÷ 4.8 × 100 = −6.25%. Kesta: 4.8 ÷ 4.5 = 1.0667, so +6.67% (from VD 0.2083 to VD 0.2222).
Check. The fee in valdas rose by exactly the kesta’s appreciation (6.67%), because the fee is fixed in kestas.
Suggested mark points (4): 1 for both fees in valdas; 1 for 6.67%; 1 for “kesta appreciated (valda depreciated)”; 1 for both percentage changes. Accept −6.25% and +6.67% in either order if each is clearly attached to the right currency.
Question 6 (constructed response · core)
Valdoria’s central bank publishes the price of one kesta in valdas at the end of each quarter.
| Quarter | VD per KS |
|---|---|
| Q1 | 0.25 |
| Q2 | 0.24 |
| Q3 | 0.26 |
| Q4 | 0.30 |
(a) Calculate the price of one valda in kestas in each quarter. Give answers to 4 decimal places. (b) Identify the quarter in which the valda appreciated against the kesta. Explain how you know. (c) Calculate the percentage change in the value of the kesta, and in the value of the valda, from Q1 to Q4. (d) A Kestrian rug costs KS 1,200. Calculate its price in valdas in Q1 and in Q4. (e) Identify one group of people who want to buy valdas with kestas, and explain why.
Worked solution and suggested Marlbridge rubric
(a) KS per VD = 1 ÷ (VD per KS): Q1 4.0000, Q2 4.1667, Q3 3.8462, Q4 3.3333.
(b) Q2. The price of a kesta fell from VD 0.25 to VD 0.24, so a valda bought more kestas (4.1667 instead of 4.0000). In Q3 and Q4 the price of a kesta rose, so the valda depreciated.
(c) Kesta: (0.30 − 0.25) ÷ 0.25 × 100 = +20%. Valda: (3.3333 − 4.0000) ÷ 4.0000 × 100 = −16.67% (exactly: 0.25 ÷ 0.30 = 0.8333, a fall of 16.67%).
(d) Q1: 1,200 × 0.25 = VD 300. Q4: 1,200 × 0.30 = VD 360.
(e) Any one, with a reason: Kestrian firms or households buying Valdorian goods or services must pay Valdorian sellers in valdas; Kestrian tourists need valdas to spend in Valdoria; Kestrian investors need valdas to buy Valdorian shares, bonds or bank deposits.
| Point | What earns it |
|---|---|
| 1 | All four reciprocals correct |
| 1 | Q2, with the reason that a kesta cost fewer valdas (or a valda bought more kestas) |
| 1 | +20% for the kesta and −16.67% for the valda |
| 1 | VD 300 and VD 360 |
| 1 | A valid group with a reason linked to paying in valdas |
In (b), naming Q2 without a reason does not earn the point. In (c), −20% for the valda is not accepted: it uses the wrong base.
Question 7 (constructed response · stretch)
On one day the rates are 1 VD = 5 KS and 1 VD = 0.8 NR.
(a) Use these two rates to calculate the price of one kesta in norras, and of one norra in kestas. (b) Later, the valda–kesta rate becomes 1 VD = 4 KS, while the valda–norra rate stays at 1 VD = 0.8 NR. Calculate the new price of one kesta in norras. State which of the kesta and the norra appreciated against the other, and by what percentage each currency’s value changed. (c) A Norvian bicycle costs NR 250. Calculate its price in kestas before and after the change in (b), and explain why the change helps Kestrian buyers.
Model answer and suggested Marlbridge rubric
(a) 5 KS and 0.8 NR both buy 1 VD, so 5 KS = 0.8 NR. Price of 1 KS = 0.8 ÷ 5 = NR 0.16. Price of 1 NR = 5 ÷ 0.8 = KS 6.25.
(b) Now 4 KS = 0.8 NR, so 1 KS = 0.8 ÷ 4 = NR 0.20 (and 1 NR = KS 5.00). The kesta buys more norras, so the kesta appreciated and the norra depreciated. Kesta: (0.20 − 0.16) ÷ 0.16 × 100 = +25%. Norra: (5.00 − 6.25) ÷ 6.25 × 100 = −20%.
(c) Before: 250 × 6.25 = KS 1,562.50. After: 250 × 5.00 = KS 1,250. The kesta now buys more norras, so the same bicycle costs Kestrians fewer kestas (20% fewer).
| Point | What earns it |
|---|---|
| 1 | NR 0.16 and KS 6.25 |
| 1 | NR 0.20 per KS after the change |
| 1 | Kesta appreciated, norra depreciated |
| 1 | +25% and −20%, each attached to the right currency |
| 1 | KS 1,562.50 and KS 1,250, with the link to the kesta buying more norras |
Accept working through valdas (for example, 1 KS = VD 0.20 = 0.20 × 0.8 NR = NR 0.16).
How did you do?
- Q1 or Q6(a) wrong: re-read “Two ways to quote the same rate” in the study guide.
- Q2 or Q6(b) wrong: revisit “Appreciation and depreciation” and the table under it.
- Q4, Q5(c), Q6(c) or Q7(b) wrong: redo Worked examples 1 and 3, using each currency’s own price.
- Q3, Q5(a) or Q6(d) wrong: revisit Worked example 2 and use a unit check.
- Q6(e) wrong: re-read “How currencies are valued relative to one another”.
Then tick off the topic checklist.