1. Advantages of currency futures contracts relative to forward contracts include _

Select one:

a. Higher liquidity b. Standardized contract specifications c. Freedom to sell the contract before maturity d. All of the abov

2. If the treasury bonds in country A consistently yield more returns compared to those in country B, we would see __ . (assuming treasury bonds are risk-free)

Select one:

a. Country A goes bankrupt b. The currency in country A appreciates against the currency in country B over time c. The currency in country A depreciates against the currency in country B over time d. The currency exchange rate is unaffected.

3. At the expiration of a futures contract, futures prices converge to __. Select one:

a. Option prices b. forward prices c. market prices d. spot prices

4. A foreign currency futures contract is a commitment to exchange certain amount of currencies in a specified exchange rate at a specified time in the future.

Select one: True False