signature: Part 1: Multiple choice question (10 questions in total accounting for 30 points) Please choose one correct answer by cireling the relevant answer. 1. An arbitrage is best defined as a) A legal condition imposed by the CFTC. b) The act of simultaneously buying and selling the same or equivalent assets or commodities for the purpose of making reasonable profits. c) The act of simultaneously buying and selling the same or equivalent assets or commodities for the purpose of making guaranteed profits. d) None of the above 2. A higher U.S. interest rate (ISO) will result in a) a stronger dollar b) a lower spot exchange rate (expressed as foreign currency per U.S. dollar). c) both a) and b) d) none of the above 3. If a foreigner purchases a U.S. government security the a) supply of dollars rises b) federal government deficit declines c) demand for dollars rises d) U.S. money supply rises 4. An increase in the supply of U.S. dollars by the Federal Reserve wil a. raise the value of the dollar because it will stimulate U.S. economic growth b. raise the value of the dollar because it will lead to higher U.S. interest rates 2