Which one of the following reasons for violations of the Law of One Price is the most obvious? A) tariffs on imports B) banking rules C) industrial policies D) exchange rate controls ANSWER Answer: A
Date: September 19th, 2020
A ________ is a telegraphic communication that, via bookkeeping entries, removes funds from the payer’s bank and deposits them in an account of the payee’s bank. A) direct send B) wire transfer C) depository transfer check D) preauthorized check ANSWER B
Date: September 19th, 2020
In the absence of pure competition, firms who segment markets may be able to charge different prices in different countries for the same good. This practice is known as ________. A) mark to market B) interest rate arbitrage C) pricing to market D) speculation ANSWER Answer: C
Date: September 19th, 2020
The version of purchasing power parity that states the exchange rates will adjust to equalize the internal and external purchasing power of a currency is known as the ________. A) relative purchasing power parity B) equilibrium purchasing power parity C) absolute purchasing power parity D) real exchange rate equilibrium ANSWER Answer: C
Date: September 19th, 2020
Within Germany, what is the name for the power of a U.S. dollar when it is used to purchase an amount of goods and services? A) internal purchasing power B) external purchasing power C) absolute purchasing power parity D) relative purchasing power parity ANSWER Answer: B
Date: September 19th, 2020
In exchange for the tailor-made maturity date provided by the repurchase agreement, a bank or security dealer provides a return slightly below than obtainable through outright purchase of similar marketable securities. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Which of the following is true of collection float? A) It represents the time delay between when payment is placed in the mail and when it is received. B) It represents the time between receipt of a payment and its deposit into a firm’s account. C) It results from the lapse between the time when […]
Date: September 19th, 2020
The higher yields on Eurodollar deposits compared with nearly all other marketable securities, governmental or nongovernmental, with similar maturities are attributable to 1. the fact that the depository banks are generally less closely regulated than U.S. banks and are therefore more risky, and 2. some foreign exchange risk may be present. Indicate whether the statement […]
Date: September 19th, 2020
A customer sends payment to a post office box which is emptied by a firm’s bank daily. The bank then processes the payments and notifies the firm of the day’s collections. This collection technique is known as ________. A) a direct send B) concentration banking C) the lockbox system D) controlled disbursing ANSWER […]
Date: September 19th, 2020
When people describe what they think an exchange rate value should be, they often use a benchmark model, known as ________. A) purchasing power parity B) interest rate parity C) the Fisher effect D) the International Fisher effect ANSWER Answer: A
Date: September 19th, 2020
