2 of 4 6. Which of the following is an example of interest rate parity? A. The Japanese yen trades at the same exchange rate as the Swiss franc. B.U.S. dollar rates on one year U.S. Treasury securities equal 1 year Japanese government bond rates. C.U.S. dollar rates on one year U.S. Treasury securities equal 1 year Japanese government bond rates, restated in dollars. D. British pound 2 year forward rates equal 2 year Swiss franc forward rates. E. All currency exchange rates and interest rates move in unison. 7. According to purchasing power parity (PPP), foreign currency exchange rates between two countries adjust to reflect changes in each country's A. unemployment rates. B. export competitiveness. C. inflation rates. D. foreign exchange reserves. E. reserve requirements. 8. Open-end mutual funds guarantee A investors a minimum rate of return. B. investors a minimum Net Asset Value (NAV). C. to redeem investors' shares upon demand at the daily Net Asset Value (NAV). D. to earn the rate of return promised in the prospectus. E. that there will be no load charges. 9. An open-ended fund has stocks of three companies: 200 shares of IBM currently valued at $50,00, 100 shares of GE currently valued at $20 and 100 shares of Digital currently valued at $30. The fund has 500 shares outstanding. What is the net asset value (NAV) of the fund? A. S30.00 B. $60.00. C. $120.00. D. S12.00 E. $37.50. 10. Closed-end investment companies A. have a variable number of shares based on demand. B. can trade at a price that is greater than, equal to, or less than the NAV C. will trade at a different price as the number of shares of the fund changes. D. issues shares that cannot be sold; hence the term "closed." E. will repurchase shares when investors want to sell