Question
please answer this 7 qustion 2.The current spot rate of pound is $1.80, and the 90-day forward rate of pound is $1.90. The pound has
please answer this 7 qustion
2.The current spot rate of pound is $1.80, and the 90-day forward rate of pound is $1.90. The pound has a forward ______ of ______.
A premium, 5.56%.
B premium, 4.87%.
C discount, 5,56%.
D discount, 4.87%.
3.Which one is a disadvantage of a freely floating exchange rate system?
A .It can adversely affect a country that has high unemployment.
B. It can adversely affect a country that has high inflation
C. A country is more insulated from unemployment problem in other countries.
D. a and b above.
4.If interest rates on the euro are consistently above U.S. interest rates, then for the international Fisher effect (IFE) to hold:
A the value of the euro would remain constant most of the time.
B the value of the euro would often depreciate against the dollar.
C
D the value of the euro would appreciate in some periods and depreciate in other periods, but on average have a zero rate of appreciation.
5.American currency options can be exercised ____; European currency options can be exercised ____.
A only on the expiration date; only on the expiration date
B any time up to the expiration date; only on the expiration date
C any time up to the expiration date; any time up to the expiration date
D only on the expiration date; any time up to the expiration date
6.If you expect the British pound to depreciate, you could speculate by ____ pound call options or ____ pound put options.
A. selling; purchasing
B. selling; selling
C. purchasing; purchasing
D. purchasing; selling
7.A firm buys a currency futures contract, and then decides before the settlement date that it no longer wants to maintain such a position. It can close out its position by:
A. selling a futures contract for a different amount of currency.
B selling an identical futures contract.
C buying an identical futures contract.
D buying a futures contract with a different settlement date.
1.Assume a central bank exchanges its currency for other foreign currencies in the foreign exchange market, and adjusts for the resulting change in the money supply simultaneously. This is an example of:
| A | indirect intervention. |
| B | nonsterilized intervention. |
| C | sterilized intervention. |
| D | pegged intervention. |
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