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.