FIN 4604. EXAMINATION QUESTIONS. ALL EXAM REVISION QUESTIONS AND CORRECT ANSWERS (ALREADY GRADED A+) (2024 UPDATE)
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Course
FINC - Finance
Institution
FINC - Finance
FIN 4604. EXAMINATION QUESTIONS. ALL EXAM REVISION QUESTIONS AND
CORRECT ANSWERS (ALREADY GRADED A+) (2024 UPDATE).
Which of the following forecasting techniques would best represent use of today's forward
exchange rate to forecast the future exchange rate? - answer- market based forecasting
...
FIN 4604. EXAMINATION QUESTIONS. ALL EXAM REVISION QUESTIONS AND
CORRECT ANSWERS (ALREADY GRADED A+) (2024 UPDATE)
Which of the following forecasting techniques would best represent use of today's forward
exchange rate to forecast the future exchange rate? - answer- market based forecasting
Under a fixed exchange rate system: - answer- central bank intervention in the foreign exchange
market is very necessary.
A eurocurrency is: - answer- any currency deposited outside its country of origin
A relative high domestic inflation, other things being equal, would tend to cause the home currency
to: - answer- depreciation.
A relative low home inflation, other things being equal, would tend to cause the home currency to:
- answer- appreciate.
The following statement is not true concerning technical forecasting of exchange rates: - answer-
the exchange rate must follow a random walk
The statement, the forward rate is an unbiased predictor of the future spot rate, means: - answer-
the forward rate is equally likely to overstate or understate the future spot.
E. The forward premium (discount) is an unbiased predictor of the expected change in exchange
rates.
The law of one price is enforced primarily by: - answer- arbitragers.
A german investment in the u.s. represents a foreign factor of production located in the u.s. and
the income from such investment adds to: - answer- gnp of germany.
, A u.s. investment in germany represents a foreign factor of production located in germany and the
income from such investment adds to: - answer- a. Gnp of the u.s.
B. Gdp of germany.
If the central bank sets a fixed exchange rate that overvalues domestic currency, then - answer-
the country will run a bop deficit.
If a japanese investor purchases a us government security: - answer- the demand for dollars
increases
The purchase of us treasury bonds by a turkish investor shows up as a: - answer- credit on the
capital account
Tourism shows up on which of the following account balance? - answer- current
The "j-curve effect" describes: - answer- the initial deterioration and eventual improvement in
the trade balance following a currency devaluation.
______ is not a factor that causes currency supply and demand schedules to shift/ change. - answer-
change in exchange rates.
A large increase in the income level in mexico along with no growth in the u.s. income level,
ceteris paribus, is expected to cause a/an _________ in mexican demand for u.s. goods, and the
mexican peso should ____________ - answer- increase; depreciate
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