Worksheetschapter 2
Total questions: 22
Worksheet time: 11mins
The German currency is called the
EURO
DM
YEN
DOLLAR
POUND
When a country’s currency depreciates
foreigners find that its exports are more expensive, and domestic residents find that imports from abroad are more expensive.
foreigners find that its exports are more expensive, and domestic residents find that imports from abroad are cheaper.
foreigners find that its exports are cheaper; however, domestic residents are not affected.
foreigners are not affected, but domestic residents find that imports from abroad are more expensive.
None of the above.
An appreciation of a country’s currency
decreases the relative price of its exports and lowers the relative price of its imports
raises the relative price of its exports and raises the relative price of its imports
lowers the relative price of its exports and raises the relative price of its imports.
raises the relative price of its exports and lowers the relative price of its imports.
By early 2002, A Canadian dollar was worth only about
15 United States cents
20 United States cents.
65 United States cents.
100 United States cents.
5 United States cents.
The largest trading of foreign exchange occurs in
NYC
LONDON
TOKYO
FRANKFURT
SINGAPORE
In 2001
20 percent of foreign exchange transactions involved exchanges of foreign currencies for U.S. dollars
10 percent of foreign exchange transactions involved exchanges of foreign currencies for U.S. dollars
30 percent of foreign exchange transactions involved exchanges of foreign currencies for U.S. dollars.
40 percent of foreign exchange transactions involved exchanges of foreign currencies for U.S. dollars
90 percent of foreign exchange transactions involved exchanges of foreign currencies for U.S. dollars.
Which one of the following statements is the most accurate? The term spot exchange rate is
misleading because even spot exchanges usually become effective only three days after a deal is struck.
misleading because even spot exchanges usually become effective only four days after a deal is struck.
misleading because even spot exchanges usually become effective only five days after a deal is struck.
misleading because even spot exchanges usually become effective only six days after a deal is struck.
misleading because even spot exchanges usually become effective only two days after a deal is struck.
Trades of U.S. dollars for Canadian dollars in New York are executed with ... day lag
1
2
3
4
Forward and spot exchange rates
are necessarily equal
do not move closely together
The forward exchange rate is always above the spot exchange rate
while not necessarily equal, do move closely together.
A foreign exchange swap
is a spot sale of a currency
is a forward repurchase of the currency.
is a spot sale of a currency combined with a forward repurchase of the currency.
is a spot sale of a currency combined with a forward sale of the currency.
An American put option on foreign exchange
quyền chọn bán
gives the buyer the right to sell the foreign currency at a known exchange rate at any time during the period of the option.
gives the seller the right to sell the foreign currency at a known exchange rate at any time during the period of the option.
gives the buyer the right to sell the foreign currency at a known exchange rate at a specific time in the future
obligates the buyer to sell the foreign currency at a known exchange rate at any time during the period of the option.
An American call option on foreign exchange
quyền chọn mua
obligates you to buy foreign currency at a known price at any time during the period of the option
gives you the right to buy foreign currency at a known price at any time during the period of the option.
gives you the right to buy foreign currency at a known price at a specific day in the future.
gives you the right to sell foreign currency at a known price at any time during the period of the option.
The exchange rate between currencies depends on
the interest rate that can be earned on deposits of those currencies
the expected future exchange rate
the interest rate that can be earned on deposits of those currencies and the expected future exchange rate.
national output.
Countries in the euro zone include
Austria, Australia, and Belgium.
Austria, Belgium, and Finland
Austria and Finland, Poland, Czeck Republic,
Austria, Belgium, Finland, and France.
Austria, Belgium, Finland, France, and Germany, Greece, Ireland, Italy, Luxembourg, Portugal, Spain
Which one of the following statements is the most accurate?
Because dollar and DM interest rates are measured in comparable terms, they can move quite differently over time
Because dollar and DM interest rates are not measured in comparable terms, they can move quite differently over time
Because dollar and DM interest rates are measured in comparable terms, they move quite the same over time
Because dollar and DM interest rates are measured in comparable terms, they still move quite differently over time.
Which one of the following statements is the most accurate?
The dollar rate of return on euro deposits is the euro interest rate plus the rate of depreciation of the dollar against the euro.
The dollar rate of return on euro deposits is approximately the euro interest rate minus the rate of depreciation of the dollar against the euro
The dollar rate of return on euro deposits is the euro interest rate minus the rate of depreciation of the dollar against the euro.
The dollar rate of return on euro deposits is approximately the euro interest rate plus the rate of appreciation of the dollar against the euro
The dollar rate of return on euro deposits is approximately the euro interest rate plus the rate of depreciation of the dollar against the euro.
If the dollar interest rate is 10 percent and the euro interest rate is 6 percent, then
an investor should invest only in dollars.
an investor should invest only in euros.
an investor should be indifferent between dollars and euros
it is impossible to tell given the information
If the dollar interest rate is 10 percent, the euro interest rate is 6 percent, and the expected return on dollar depreciation against the euro is zero percent, then
an investor should invest only in dollars.
an investor should invest only in euros.
an investor should be indifferent between dollars and euros.
It is impossible to tell given the information
If the dollar interest rate is 10 percent, the euro interest rate is 6 percent, and the expected return on dollar depreciation against the euro is 4 percent, then
an investor should invest only in dollars
an investor should invest only in euros.
an investor should be indifferent between dollars and euros
It is impossible to tell given the information.
If the dollar interest rate is 10 percent and the euro interest rate is 6 percent, and the expected return on dollar depreciation against the euro is 8 percent, then
an investor should invest only in dollars.
an investor should invest only in euros
an investor should be indifferent between dollars and euros
It is impossible to tell given the information
Which of the following statements is the most accurate?
A rise in the interest rate offered by dollar deposits causes the dollar to appreciate.
A rise in the interest rate offered by dollar deposits causes the dollar to depreciate
A rise in the interest rate offered by dollar deposits does not affect the U.S. dollar
For a given euro interest rate and constant expected exchange rate, a rise in the interest rate offered by dollar deposits causes the dollar to appreciate.
Which of the following statements is the most accurate?
For a given U.S. interest rate and a given expectation with regard to the future exchange rate, a rise in the interest rate paid by euro deposits causes the dollar to depreciate
For a given U.S. interest rate and a given expectation with regard to the future exchange rate, a rise in the interest rate paid by euro deposits causes the dollar to appreciate.
A rise in the interest rate paid by euro deposits does not affect the value of the dollar.
A rise in the interest rate paid by euro deposits causes the dollar to depreciate
