fin 535

Oct 30th, 2013
DreamIt
Category:
Business & Finance
Price: $20 USD

Question description





Question 1






  1.  

    Assume that the income levels in U.K. start to
    rise, while U.S. income levels remain unchanged. This will place ____ pressure
    on the value of British pound. Also, assume that U.S. interest rates rise, while
    the British pound remains unchanged. This will place ____ pressure on the value
    of British pound.

    Answer



    downward;
    downward




    upward;
    downward




    upward;
    upward




    downward;
    upward


1 points  


Question 2






  1.  

    If a country experiences an increase in
    interest rates relative to U.S. interest rates, the inflow of U.S. funds to
    purchase its securities should ____, the outflow of its funds to purchase U.S.
    securities should ____, and there is ____ pressure on its currency's equilibrium
    value.

    Answer



    increase; decrease;
    downward




    decrease; increase;
    upward




    increase; decrease;
    upward




    decrease; increase;
    downward




    increase; increase;
    upward


1 points  


Question 3






  1.  

    Assume that the U.S. places a strict quota on
    goods imported from Chile and that Chile does not retaliate. Holding other
    factors constant, this event should immediately cause the U.S. demand for
    Chilean pesos to ____ and the value of the peso to
    ____.

    Answer



    increase;
    increase




    increase;
    decline




    decline;
    decline




    decline;
    increase


1 points  


Question 4






  1.  

    When the "real" interest rate is relatively
    low in a given country, then the currency of that country is typically expected
    to be:

    Answer



    weak, since the country's quoted
    interest rate would be high relative to the inflation
    rate.




    strong, since the country's quoted
    interest rate would be low relative to the inflation
    rate.




    strong, since the country's quoted
    interest rate would be high relative to the inflation
    rate.




    weak, since the country's quoted
    interest rate would be low relative to the inflation
    rate.


1 points  


Question 5






  1.  

    The phrase "the dollar was mixed in trading"
    means that:

    Answer



    the dollar was strong in some
    periods and weak in other periods over the last month.




    the volume of trading was very high
    in some periods and low in other periods.




    the dollar was involved in some
    currency transactions, but not others.




    the dollar strengthened against
    some currencies and weakened against
    others.

Tutor Answer

(Top Tutor) Daniel C.
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School: Rice University
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