Quiz 6 - Quiz 6 1 All of the following drive changes in the...

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Quiz 6 1. All of the following drive changes in the foreign exchange market except : a. A country’s desire to import b. Government surplus c. Productivity differences d. Expected inflation e. Real, risk adjusted interest rates Answer: b 2. The British pound is worth 2.3198 Swiss francs and the Mexican peso is worth 0.14512 Swiss francs. How many pesos is the British pound worth? A) 0.0626 B) 0.3354 C) 2.9818 D) 15.985 E) none of the above Ans: D 3.Under a flexible exchange rate system, countries allow their currency to: a. fluctuate so as to clear the exchange market b. be fixed at a later date c. be pegged to the gold price d. none of the above Answer: a 4. When anticipated inflation increases in a country, investors will a. Invest more in that country and push the currency up b. Pull out their investments from that country and cause the currency to devaluate c. Be indifferent towards inflation d. Expect higher returns on their existing investments Answer: b
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5. Rank the following foreign exchange participants from largest to smallest in trading
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This note was uploaded on 02/23/2010 for the course BUSINESS intb 3353 taught by Professor Prodon during the Spring '10 term at University of Houston.

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Quiz 6 - Quiz 6 1 All of the following drive changes in the...

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