QUESTION 2

In the interbank market dealers quote the forward rate only as a discount from, or premium on, the spot rate, and this forward differential is known as the:

		discount rate
		premium rate
		outright rate
		swap rate

5 points

QUESTION 3

For a US trader, an interbank quotation of $1.4631/ is in

		European terms
		non-conventional terms
		indirect terms
		direct terms

5 points

QUESTION 4

An increase in the current account deficit will place _____ pressure on the value of the home currency, other things equal.

		upward
		downward
		no
		upward or downward depending on the size of the deficit

5 points

QUESTION 5

If a nation's income exceeds its spending, then

		savings will be less than domestic investment
		the nation must run a current account deficit
		the balance of payments will have deficits for the next two years
		the nation must run a capital account deficit