Which one of the following would some say invalidates the unbiasedness hypothesis? A) the Fisher Effect B) the efficient market hypothesis C) the Siegel paradox D) the law of one price ANSWER Answer: C
Date: September 19th, 2020
If market efficiency is identified with parity, currency markets that are ________ provide no opportunities for currency traders to earn profits. A) not in parity B) in parity C) in interest rate parity only D) in purchasing power parity ANSWER Answer: B
Date: September 19th, 2020
Disbursement float is experienced by a payee and is a delay in the actual withdrawal of funds. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Mail float is the delay between the deposit of a check by a payee and the actual availability of the funds. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Collection float results from the lapse between the time that a firm deducts a payment from its checking account ledger and the time that funds are actually withdrawn from its accounts. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
When the possibility exists that the government of a nation may impose some form of exchange controls or tax on foreign investment, the risk is known as ________ risk. A) political B) exchange controls C) business risk D) government ANSWER Answer: A
Date: September 19th, 2020
The entire process resulting from a check issue and mail by a payer company to a payee company (i.e., mail float, processing float, and clearing float) is disbursement float to the payer company and is collection float to the payee company. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
If interest rate parity is in effect, there are ________. A) no profitable opportunities for covered interest arbitrage B) many opportunities for covered interest arbitrage C) currency dealers will arbitrage interest rate differentials in different countries D) currency dealers will be motivated to arbitrage forward market contracts ANSWER Answer: A
Date: September 19th, 2020
When it is said that there exists covered interest arbitrage opportunities, the term covered means the arbitrage is not exposed to A) exchange rate risk. B) manipulation by speculators. C) central bank interventions. D) government actions against the arbitrageurs. ANSWER Answer: A
Date: September 19th, 2020
What is the name for the bank market for deposits and loans that is denominated in a currency different to the currency of the country in which a bank is operating? A) internal currency market B) foreign exchange market C) external currency market D) interbank market ANSWER Answer: C
Date: September 19th, 2020
