tb19 - Chapter 19 The Foreign Exchange Market T Multiple...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Chapter 19 The Foreign Exchange Market T Multiple Choice 1) The exchange rate is (a) the price of one currency relative to gold. (b) the value of a currency relative to inflation. (c) the change in the value of money over time. (d) the price of one currency relative to another. (e) all of the above. Answer: D Question Status: New 2) Exchange rates are determined in (a) the money market. (b) the foreign exchange market. (c) the stock market. (d) the capital market. (e) both (b) and (c) of the above. Answer: B Question Status: New 3) Although market trades are said to involve the buying and selling of currencies, most trades involve the buying and selling of (a) bank deposits denominated in different currencies. (b) SDRs. (c) gold. (d) ECUs. Answer: A Question Status: Previous Edition 4) The immediate (two-day) exchange of one currency for another is a (a) forward transaction. (b) spot transaction. (c) money transaction. (d) exchange transaction. (e) daily transaction. Answer: B Question Status: New Chapter 19 The Foreign Exchange Market 655 5) An agreement to exchange dollar bank deposits for euro bank deposits in one month is a (a) spot transaction. (b) future transaction. (c) forward transaction. (d) monthly transaction. (e) deposit transaction. Answer: C Question Status: New 6) Today 1 euro can be purchased for $1.10. This is the (a) spot exchange rate. (b) forward exchange rate. (c) fixed exchange rate. (d) money exchange rate. (e) financial exchange rate. Answer: A Question Status: New 7) In an agreement to exchange dollars for euros in three months at a price of $0.90 per euro, the price is the (a) spot exchange rate. (b) money exchange rate. (c) forward exchange rate. (d) monthly exchange rate. (e) fixed exchange rate. Answer: C Question Status: New 8) When the value of the British pound changes from $1.25 to $1.50, then (a) the pound has appreciated and the dollar has appreciated. (b) the pound has depreciated and the dollar has appreciated. (c) the pound has appreciated and the dollar has depreciated. (d) the pound has depreciated and the dollar has depreciated. Answer: C Question Status: Previous Edition 9) When the value of the British pound changes from $1.50 to $1.25, then (a) the pound has appreciated and the dollar has appreciated. (b) the pound has depreciated and the dollar has appreciated. (c) the pound has appreciated and the dollar has depreciated. (d) the pound has depreciated and the dollar has depreciated. Answer: B Question Status: Previous Edition 656 Frederic S. Mishkin Economics of Money, Banking, and Financial Markets, Seventh Edition 10) When the value of the dollar changes from 0.5 pounds to 0.75 pounds, then (a) the pound has appreciated and the dollar has appreciated....
View Full Document

This note was uploaded on 10/17/2011 for the course ECON 317 taught by Professor Guidry during the Spring '11 term at Nicholls State.

Page1 / 55

tb19 - Chapter 19 The Foreign Exchange Market T Multiple...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online