If a particular currency is consistently declining substantially over time, then a spot rate forecast will...
If a particular currency is consistently declining substantially over time, then a spot rate forecast will usually have:
A. upward bias.
B. no bias.
C. downward bias.
D. forecasted future exchange rate accurately.
Homework Answers
if a particular currency is consistently declining substantially over time, then a spot rate forecast will usually have:
A. upward bias.
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If a particular currency is consistently declining substantially
over time, then a spot rate forecast will...
Mexican interest rates are normally substantially higher than U.S. interest rates. a. Assuming that interest rate...
Mexican interest rates are normally substantially higher than U.S. interest rates. a. Assuming that interest rate parity exists, do you think hedging with a forward rate would be beneficial if the spot rate of the Mexican peso was expected to decline slightly over time? b. Would hedging with a money market hedge be beneficial if the spot rate of the Mexican peso was expected to decline slightly over time (assume zero transaction costs)? Explain. c. What are some limitations on...
Next one-year period, forecasted inflation rate is 5% in China and 3% in US. Current spot...
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You work as a currency trader at the Big Time Bank and specialise in trading the...
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8) The price of one currency in terms of another is called A) the terms of...
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33 Which best describes the dollar–yuan exchange rate over time? A)volatile B)steady C)gradually rising D)gradually declining
33 Which best describes the dollar–yuan exchange rate over time? A)volatile B)steady C)gradually rising D)gradually declining
One year ago, the spot exchange rate between country F and country J was S0=F/J 155.Today,...
One year ago, the spot exchange rate between country F and country J was S0=F/J 155.Today, the spot rate is S1=F/J 160. Inflation over the year was 2% in country J and 3%in country F. a) Did currency J appreciate or depreciate over the year? By how much? b) One year ago, what F/J exchange rate would PPP have predicted for today? c) Was currency J overvalued or undervalued against currency F over the period? By how much? d) Given...
When a currency trades at a forward discount in the forward market a. the forward rate...
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5A. Suppose the current spot rate for the UK pound is $1.9586/£. The annual inflation rates...
5A. Suppose the current spot rate for the UK pound is $1.9586/£. The annual inflation rates in the US and in the UK are expected to be 2% and 5%, respectively. This means that: a. The U.S. dollar should appreciate over the next year. b. The U.S. dollar should depreciate over the next year. c. Both a and b are true. d. Neither a nor b are true. 5B. Using the information provided in question 5A, what is your best...
10. A put option is the amount or percentage by which the existing spot rate exceeds...
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Several factors affect the exchange rate of a currency with another currency. Which of the following...
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8) The price of one currency in terms of another is called A) the terms of trade. C) purchasing power parity B) a currency band D) the exchange rate. 19) -- exchange rates are either held constant or allowed to fluctuate( ) only within very narrow boundaries, A) managed float exchange rate system B) Freely exchange rate system ) pegged exchange rate system D) fixed exchange rate system : ------- Is the replacement (Jap) of a foreign currency with U.S...
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Several factors affect the exchange rate of a currency with another currency. Which of the following statements are true about the factors that have an impact on exchange rates? Check all that apply. When a government limits imports and restricts foreign exchange transactions, its currency's value tends to increase relative to other currencies. An increase in inflation tends to increase the currency's value with respect to other currencies with lower inflation. If a government intends to prevent its currency's value...
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