47 practice sets · Page 3 of 3
According to the Purchasing Power Parity (PPP) theory
Exchange rates between two national currencies will adjust daily to reflect price level differences in the two countries
In the long run, inflation rates in different countries will equalize around the world
In the long run, the exchange rates between two national currencies will reflect pricelevel differences in the two countries
None of the above
A/An .............is an agreement between a buyer and seller that a fixed amount of one currency will be delivered at a specified rate for some other currency)
Eurodollar transaction
import/export exchange
foreign exchange transaction
interbank market transaction
A speculator in foreign exchange is a person who
buys foreign currency, hoping to profit by selling it a a higher exchange rate at some later date
earns illegal profit by manipulation foreign exchange
causes differences in exchange rates in different geographic markets
None of the above
A simultaneous purchase and sale of foreign exchange for two different dates is called
currency devalue
currency swap
currency valuation
currency exchange
A forward currency transaction:
Is always at a premium over the spot rate
Means that delivery and payment must be made within one business day (USA/Canad
or two business days after the transaction date
Calls for exchange in the future of currencies at an agreed rate of exchange
A forward contract to deliver British pounds for U)S) dollars could be described either as ..................or ...............
buying dollars forward; buying pounds forward
selling pounds forward; selling dollars forward
selling pounds forward; buying dollars forward
selling dollars forward; buying pounds forward
A floating exchange rate
is determined by the national governments involved
remains extremely stable over long periods of time
is determined by the actions of central banks
is allowed to vary according to market forces)
