Answer - Spot exchange rate
Spot exchange rate is the amount of one currency Will be traded for another on a particular day. in other words it is the price a person would have to pay for buying another currency.
What happens in the foreign exchange market does not directly impact the sales, profits, and strategy...
The rate at which a foreign exchange dealer converts one currency into another currency on a particular day is the Multiple Choice o forward exchange rate. O fixed exchange rate. O future exchange rate. o spot exchange rate. O floating exchange rate.
Foreign Exchange Market The foreign exchange market serves two main functions. The first is to convert the currency of one country into the currency of another, and the second is to provide some insurance against foreign exchange risk. When two companies are trying to provide some insurance against foreign exchange risk, they can either exchange the currency immediately, which is caled spot exchange, or at a specific date in the future, which is called a forward exchange rate.
One function of the foreign exchange market is to Multiple Choice provide some insurance against foreign exchange risk. protect short-term cash flow from adverse changes in exchange rates. eliminate volatile changes in exchange rates. reduce the economic exposure of a firm. enable companies to engage in capital flight when countertrade is not possible. Rhonda tells Kevin that he will receive 0.86 euro for every U.S. dollar he wants to convert. Rhonda is referring to Multiple Choice the exchange rate. arbitration....
Currency speculation takes place when Multiple Choice the exchange rate at which a foreign exchange dealer will convert one currency differs on a particular day. the growth in a country's money supply exceeds the growth in its output, leading to price inflation. the purchase of securities in one market are immediately resold in another to profit from a price discrepancy. there is a simultaneous purchase and sale of a given amount of foreign exchange for two different value dates. there...
Sri Lanka is a poorcountry. What is the impact on the market for foreign-currency exchange in Sri Lanka, if Sri Lanka started to export more tea? (5 points) What is the relationship between loanable funds market and market for foreign-currency exchange? (5 points) Is budget surplus good for an economy? (5 points) 4.Using graphs, explain the implication of an economy’s budget surplus on the real exchange rate. (10 points)
When the foreign exchange market determines the relative value of a currency, we say that the country is adhering to a pegged exchange rate regime. True False
In the open-economy macroeconomic model, if there were a surplus in the market for foreign-currency exchange, the real exchange rate would appreciate. a. True b. False
According to the text, the average foreign exchange trading around the world ____ per day. a. equals about $200 billion b. equals about $400 billion c. equals about $700 billion d. exceeds $1 trillion Assume a Japanese firm invoices exports to the U.S. in U.S. dollars. Assume that the forward rate and spot rate of the Japanese yen are equal. If the Japanese firm expects the U.S. dollar to ____ against the yen, it would likely wish...
What determines the exchange rate? If a nation's currency appreciates in the foreign market, how will this impact net exports? Explain.
show works 10 points 18. James Chang, a foreign exchange at J.P. Morgan Chase, can invest €100 million or £100 million of the bank's short-term funds in coverage interest arbitrage with the Euro. He has the following quotes. Spot exchange rate E1230/ 180-day forward rate EL 250/E 180-day euro interest rate 3.00% per year (1.5% for 180 days) 180 day pound interest rate 4.00% per year (2.0% for 180 days) Clearly explain how James Chang can make a covered interest...