CH_4_QME1 - Chapter4Quizme 1. The value of the Australian...

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Chapter 4 Quizme 1. The value of the Australian dollar (A$) today is $0.73. Yesterday, the value of the Australian dollar was $0.69. The Australian dollar ________ by _______%. A) depreciated; 5.80 B) depreciated; 4.00 C) appreciated; 5.80 D) appreciated; 4.00 2. If a currency’s spot rate market is ________, its exchange rate is likely to be __________ to a single large purchase or sale transaction. A) liquid; highly sensitive B) illiquid; insensitive C) illiquid; highly sensitive D) none of the above. 3. _________ is not a factor that causes currency supply and demand schedules to change. A) Relative inflation rates B) Relative interest rates C) Relative income levels D) Expectations E) All of the above are factors that cause currency supply and demand schedules to change. 4. Investors from Germany, the United States, and Britain frequently invest in each other based on prevailing interest rates. If British interest rates increase, German investors are likely to buy ________ dollar-denominated securities, and the euro is likely to _________ relative to the dollar. A) fewer; depreciate
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This note was uploaded on 03/01/2012 for the course FINANCE 780 taught by Professor Scott during the Spring '12 term at Missouri State University-Springfield.

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CH_4_QME1 - Chapter4Quizme 1. The value of the Australian...

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