Economics - Foreign Exchange
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Question 1 of 45
1. Question
The most widely traded currency in the foreign exchange market is the:
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Question 2 of 45
2. Question
The supply of foreign currency tends to be:
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Question 3 of 45
3. Question
Suppose that a Swiss television set that costs 400 francs in Switzerland cost $200 in the United States. The exchange rate between the franc and the dollar is:
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Question 4 of 45
4. Question
In the early eighties, the Federal Reserve pursed a tight monetary policy. All else being equal. the impact of that policy was to interest rates in the United States relative to those in Europe and cause the dollar to _____ against European currencies
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Question 5 of 45
5. Question
Under a system of floating exchange rates the pound would depreciate in value if there occurs:
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Question 6 of 45
6. Question
A depreciation of the dollar will have its most pronounced impact on imports if the demand for imports is:
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Question 7 of 45
7. Question
During the era of dollar appreciation from 1981 to 1985 a main reason why the dollar did not fall in value was:
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Question 8 of 45
8. Question
Which financial instrument provides a buyer the right to purchase or sell a fixed amount of currency at a prearranged price, within a few days to a couple of years:
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Question 9 of 45
9. Question
The largest volume of foreign exchange trading takes place in:
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Question 10 of 45
10. Question
Given the foreign currency market for the Swiss franc, the supply of franc slopes upward, because as the dollar price of the franc rises:
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Question 11 of 45
11. Question
In a supply and demand diagram for Japanese yen, with the exchange rate in dollars per yen on the vertical axis, the demand schedule for yen is drawn sloping:
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Question 12 of 45
12. Question
Suppose there occurs an increase in the Canadian demand for Japanese computers This results in a (an):
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Question 13 of 45
13. Question
The exchange rate is kept the same across geographically separate markets by:
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Question 14 of 45
14. Question
The reduction or covering of foreign exchange risk is called:
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Question 15 of 45
15. Question
An important feature of a _____ is that the holder has the right but not the obligation to buy or sell currency:
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Question 16 of 45
16. Question
The least common type of transaction in the foreign exchange is a:
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Question 17 of 45
17. Question
If the bank is selling francs for $0.45, then what is the implied franc price of the dollar?
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Question 18 of 45
18. Question
The difference between bid (buying) rates and ask (selling) rates is called the:
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Question 19 of 45
19. Question
Riskless transactions to take advantage of profit opportunities due to a price differential or a yield differential in excess of transaction costs are called
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Question 20 of 45
20. Question
The essential feature of a _____ is that it immediately fixed the rate at which a specified amount of one currency is to be delivered in exchange for a specific amount of another at a future date
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Question 21 of 45
21. Question
The franc is said to be selling at a ____ if the spot dollar price is $0.48 and the nine month forward rate is $0.42
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Question 22 of 45
22. Question
Suppose that Boeing is to receive payment in euros in 6 month and wants to engage in hedging the firm would ____ euros on the 6 month forward market in order to protect itself from a/an of the euro
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Question 23 of 45
23. Question
If Sweden’s currency depreciates relative to Norway’s currency
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Question 24 of 45
24. Question
If the exchange rate is 11 Mexican pesos per U.S dollar, then it takes ____ to buy 1 peso.
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Question 25 of 45
25. Question
Which of the following is not a reason why Joe Smith (an American) might participate as a demander in the foreign exchange market?
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Question 26 of 45
26. Question
____ represent the most widely used tool in relational finance for measuring the average value of a currency relative to a number of other currencies
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Question 27 of 45
27. Question
Investor engage in _____ when they move funds into foreign currencies in order to take advantage to interest rates abroad that are higher than domestic interest rates
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Question 28 of 45
28. Question
Currency speculation is _____ if speculators bet against market forces that cause exchange fluctuations, thus moderating such fluctuations
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Question 29 of 45
29. Question
The real effective exchange rate for the U.S dollar
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Question 30 of 45
30. Question
A difference between forward and futures contracts is that:
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Question 31 of 45
31. Question
Speculators in foreign exchange markets do all of the following except
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Question 32 of 45
32. Question
The price of one country’s currency in terms of another country’s currency is the:
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Question 33 of 45
33. Question
All currencies other than the domestic currency of a given country are referred to as:
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Question 34 of 45
34. Question
The agreements that were reached at the Bretton Woods conferences in 1944 established a system:
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Question 35 of 45
35. Question
In 1971, most countries:
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Question 36 of 45
36. Question
Exchange rates that are determined by the unregulated forces of supply and demand are:
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Question 37 of 45
37. Question
If the Bank of England reduces the money supply to reduce inflation a floating exchange rate will aid the Bank of England in fighting inflation because:
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Question 38 of 45
38. Question
Expansionary monetary policy:
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Question 39 of 45
39. Question
A fiscal expansion in the UK.
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Question 40 of 45
40. Question
The fall in value of one currency relative to another is:
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Question 41 of 45
41. Question
The rise in value of one currency relative to another is:
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Question 42 of 45
42. Question
The theory of international exchange that holds that exchange rates adjust to offset differences in countries inflation rates in the:
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Question 43 of 45
43. Question
Under a system of floating exchange rates there is a general tendency for:
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Question 44 of 45
44. Question
If a nation’s interest rates are relatively low compared to those of other countries then the exchange value of its currency will tend to:
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Question 45 of 45
45. Question
The J-curve effect refers to the observation that:
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