Write T for true an F for false for each statement below

1. The increase in domestic price leads to reduced demand of the currency and to eventual appreciation

2. The Portfolio Balances Models are generally described as general equilibrium models. A state of equilibrium that incorporates all asset markets not just the money market

3. The fundamental approach under floating exchange rate are simply the result of interactions between the demand for and the supply of the currencies represented. It presupposes certain mode of behavior by market participants

4. The strategies that the firm uses to manage foreign exchange exposure are usually referred to as covering, when the forward market is used to manage exposure the strategy is sometimes termed hedging

5. Under balance sheet hedge, one obvious way of eliminating foreign exchange exposure is to match exposed assets and liabilities for each currency