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The primary motive of foreign exchange activities by most central banks is profit. True False The biggest currency trading center is New York Chicago London
The primary motive of foreign exchange activities by most central banks is profit. True False The biggest currency trading center is New York Chicago London Tokyo ____ are NOT one of the three categories reported for foreign exchange. Spot transactions Swap transactions Strip transactions Forward transactions A ____ transaction in the foreign exchange market requires an almost immediate delivery (typically within two days) of foreign exchange. spot forward futures none of the above From the viewpoint of a British investor, which of the following would be a direct quote in the foreign exchange market? SF2.40/pound $1.50/pound pound 0.55/euro $0.90/euro If an identical product can be sold in two different markets, and no restrictions exist on the sale or transportation costs, the product's price should be the same in both markets. This is known as relative purchasing power parity interest rate parity the law of one price equilibrium The Economist publishes annually the "Big Mac Index" by which they compare the prices of the McDonald's Corporation's Big Mac hamburger around the world. The index estimates the in question are the same across the world and therefore, the price should be the same. If a Big Mac costs $2.54 in the United States and 294 yen in Japan, what is the estimated exchange rate of yen per dollar as hypothesized by the Hamburger index? $0.0086/yen yen 124/$ $0.0081/yen yen 115.75/$
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