Economics > EXAM > International Business and Money Summary (all-inclusive) Questions and Answers 2023 (All)
International Business and Money Summary (all-inclusive) Questions and Answers 2023
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The extent to which the income from individual transactions is affected by fluctuations in foreign exchange values is known as _______ exposure. - -transaction -Assume that the interest rate on bor... rowing in japan is 1 percent, while the interest rate on deposits in Australian banks is 5 percent. A trader borrows in yen and then converts the money into Australian dollars and deposits it in an Australian bank to make 4 percent margin. Which type of trade is this an example of? - -Carry Trade -Which of the following is one of the mot important trading centers in the foreign exchange market? - -Zurich -An ___ is one in which prices do not reflect all available information. - -inefficient market -Which of the following refers to the simultaneous purchase and sale of a given amount of foreign exchange for two different value dates? - -currency swap -Purchasing power parity theory states that given relatively efficient markets, the price of a "basket of goods" should be - -roughly equivalent in each country -The _____ is the rate at which a foreign exchange dealer converts one currency into another currency on a particular day. - -spot exchange rate -The ____ school of thought argues that forward exchange rates do the best possible job of forecasting future spot rates and therefore investing in forecasting services would be a waste of money. - -efficient market [Show More]
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