Most of the trading in Eurobonds occur in ____________________.

• Munich

• Frankfurt

• London

• New York

• Paris

A T-shirt is currently selling for $100 in the U.S. The current exchange rate between U.S. dollar and Canadian dollar is $1 = C$1.43. ____________ provides support to the idea that the T-shirt that sells for $100 in the U.S. is currently selling in Canada for $143.

• Unbiased forward rates condition

• Uncovered interest rate parity

• International fisher effect

• Purchasing power parity

• Interest rate parity

Susan and Greg have just agreed to exchange U.S. dollars for Australian dollars based on today's exchange rate. In addition, settlement of this transaction will take place tomorrow. The exchange rate applies to this agreement should be the ________________.

• spot exchange rate

• forward exchange rate

• triangle rate

• cross rate

• current rate

In the foreign exchange market, spot trades must be settled _____________

• at the time of the trade.

• on the day following the trade date.

• within two business days.

• within three business days.

• within one week of the trade date.