Question
1.Answer the following multiple choice question i.Assume that the forward rate is used to forecast the spot rate. The forward rate of the Canadian dollar
1.Answer the following multiple choice question
i.Assume that the forward rate is used to forecast the spot rate. The forward rate of the Canadian dollar contains a 6% discount. Today's spot rate of the Canadian dollar is 0.47. The spot rate forecasted for one year ahead is:
a.0.4418.
b.0.5418.
c.0.3418.
d.0.2418.
ii. In the balance of payments, any transaction resulting in a receipt from foreigners is recorded as a credit, with a positive sign.
a. True b. False
iii.Countries do not need to achieve balance-of-payments equilibrium every year.
a. True b. False
iv.The Current Account of the Balance of Payments is typically dominated by the Balance of Trade
a. True b. False
v.A floating exchange rate is largely market determined, without an ascertainable or predictable path for the rate.
a. True b. False
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