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QUESTION 1 Which of the following statements is most CORRECT? One advantage of forward contracts is

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QUESTION 1 Which of the following statements is most CORRECT? One advantage of forward contracts is. 1 answer below » QUESTION 1 Which of the following statements is most CORRECT? One advantage of forward contracts is that they are default free. Futures contracts generally trade on an organized exchange and are marked to market daily. Goods are never delivered under forward contracts, but are almost always delivered under futures contracts. There are futures contracts for currencies but no forward contracts for currencies. Futures contracts don’t have any margin requirements but forward contracts do. 10 points Document Preview: View complete question » QUESTION 1 Which of the following statements is most CORRECT? One advantage of forward contracts is that they are default free. Futures contracts generally trade on an organized exchange and are marked to market daily. Goods are never delivered under forward contracts, but are almost always delivered under futures contracts. There are futures contracts for currencies but no forward contracts for currencies. Futures contracts don’t have any margin requirements but forward contracts do. 10 points Document Preview: QUESTION 1

Which of the following statements is most CORRECT?

One advantage of forward contracts is that they are default free.

Futures contracts generally trade on an organized exchange and are marked to market daily.

Goods are never delivered under forward contracts, but are almost always delivered under futures contracts.

There are futures contracts for currencies but no forward contracts for currencies.

Futures contracts don’t have any margin requirements but forward contracts do.
10 points
QUESTION 2

When the value of the U.S. dollar appreciates against another country’s currency, we may purchase more of the foreign currency with a dollar.
True
False
10 points
QUESTION 3

The United States and most other major industrialized nations currently operate under a system of floating exchange rates.
True
False
10 points
QUESTION 4

A foreign currency will, on average, depreciate against the U.S. dollar at a percentage rate approximately equal to the amount by which its inflation rate exceeds that of the United States.
True
False
10 points
QUESTION 5

If one Swiss franc can purchase $0.71 U.S. dollars, how many Swiss francs can one U.S. dollar buy?

0.50

0.71

1.00

1.41

2.81
10 points
QUESTION 6

Suppose 144 yen could be purchased in the foreign exchange market for one U.S. dollar today. If the yen depreciates by 8.0% tomorrow, how many yen could one U.S. dollar buy tomorrow?

155.5 yen

144.0 yen

133.5 yen

78.0 yen

72.0 yen
10 points
QUESTION 7

Suppose that currently, 1 British pound equals 1.62 U.S. dollars and 1 U.S. dollar equals 1.62 Swiss francs. What is the cross exchange rate between the pound and the franc?

1 British pound equals 3.2400 Swiss francs

1 British pound equals 2.6244 Swiss francs

1 British pound equals 1.8588 Swiss francs

1 British pound equals 1.0000 Swiss francs

1 British pound equals 0.3810… Attachments: Q-Attachment…..docx Q-Attachment-….txt View less » Aug 01 2015 04:27 PM


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