Along with the decrease in the price of oil, the Covid- 19 pandemic situatic this country is currently facing a continuous deficit in its-balance of payme expected to O a. Depreciate O b. Fluctuate O c Show no specific tendency npreciate
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- A current account deficit implies that* more goods and services are exported than are imported. the country borrowed from abroad more than it loaned and/or sold off some of its assets. the country is going bankrupt. the value of the dollar will rise. there is excessive consumption of foreign financial assets.Suppose America experiences a negative balance on goods and services (imports higher than exports.) If the exchange rate decreases, then a . imports will be expensive. b . goods and services balance will remain unchanged. c . deficit on goods and services will be reduced d . deficit on goods and services will increase e . None of the answers is correctWhich of the following best describes the situation when the value of a country’s exports is more than that of its imports? a. The country is experiencing a financial account surplus. b. The country is experiencing a current account surplus. c. The country is experiencing a financial account deficit. d. The country is experiencing a current account deficit.
- Insert Design Layout References Mailings Review View 12 三 abc X, X* Styles ab A Aa v A A Font Paragraph Styles ..1 | 1...1.. . . . ... 4 |. .5. |. 6 Last month, the value of €1 was $1.30. During the last month the euro (€) depreciated by 5%. What is the value of euro today? * $1.235 $1.30 $1.330 $1.365 Karen Co. produces a product in the United Kingdom at a cost of £0.55 per unit which it then sells in France for €1.25 per unit. If in the currency markets,1 U.S. dollar = E0.6373 and 1 U.S. dollar = €1.0279, how much profit is realized by Karen Co. on each unit of product sold? * $0.7857 $0.3581 S0 2571 S0.1095 Jsing the Capital Asset Pricing Model (CAPM), the required rate of return for a firm with a beta of 1.25 when the market retum is 14% and the risk-free rate is 6% is 14% 6% 7.5% 16% Assume a stock price is P120, and in next year, it will either rise by 10 percent or fall by 20 percent. The risk-free interest rate is 6% A call ootion on this stock has an exercise price of P130,…According to the flow of balance of payment (BOP) approach to exchange rate determination, there are financial measures being put in place by countries with managed floating exchange rate regime in order to cope with a deficit in its BOP.In order to control those countries currency volatility and opt for stabilization what will happen if they run persistent BOP deficits for a couple of years? T-Mobile., like many emerging telecom carriers, has only limited and infrequent access to domestic debt and equity markets. As a financial management at Ait, how would you be able to demonstrate to the Board of Directors and convince them as to why the Net Present Value and Internal Rate of Return capital budgeting decision rules sometimes provide different rank orderings of investment project alternatives? Equipment that costs $15,000 and generates a $5,000 annual return would appear to "pay back" on the investment in 3 years. If economists expect inflation to rise 30 percent annually, what…Which would indicate that hyperinflation exists? a. Sales on credit are at lower prices than cash sales. b. Inflation is approaching or exceeds 20% per year. c. Monetary items do not increase in value. d. People prefer to keep their wealth in nonmonetary assets or a stable foreign currency.
- Suppose that the Reserve Bank of New Zealand believes the New Zealand dollar (NZD) is too weak and wishes to conduct a NZD5,000,000 unsterilized foreign exchange market intervention. Which of the following is correct with regards to its balance sheet? Liabilities would decrease by NZD5,000,000 worth of Treasury bills Assets would increase by NZD5,000,000 worth of currency in circulation Liabilities would increase by NZD5,000,000 worth of currency in circulation Assets would decrease by NZD5,000,AIE Ah of foreign reservesAssume that a country, due to speculation in the foreign exchange market, faces a sudden capital outflow (see figure below). If the country has high levels of foreign denominated debt and inadequate foreign reserves answer the following questions, [Questions 17,18,19] e-Exchange Rate Short Run NX NCO, NY, A shift in the NCD curve dae to a sudden capital outflow NCO before NCO her Long Ran NX NX, NCO Question 17: In a free float foreign exchange rate regime the country will experience immediately. a. an increase in NX due to currency devaluation at NX b. business bankruptcies due to currency devaluation e a devaluation of its currency from e to e d. a devaluation of its currency from esto es with no change in NX e all of the abovenegative net exposure C. a fully balanced position. D. zero net exposure. 12. The levels of foreign currency assets and liabilities at banks have years, and the level of foreign currency trading has in recent A. increased; increased B. decreased; decreased C. increased; decreased D. decreased; increased E. decreased; stayed the same A U.S. bank converted $1 million to Swiss francs to make a Swiss franc loan to a val customer when the exchange rate was 1.2 francs per dollar. The borower in one year. The borower repais 13.
- Which of the following is true? A large increase in the income level in Singapore along with no growth in the U.S. income level is normally expected to cause (assuming no change in interest rates or other factors) an increase in Singapore demand for U.S. goods, and the Singapore dollar should depreciate. If inflation in Australia suddenly increased while U.S. inflation stayed the same, there would be an outward shift in the demand schedule for AU$ and an inward shift in the supply schedule for AU$. (AU$ stands for the Australian dollar.) For a U.S. speculator, when expecting a foreign currency to depreciate, a possible way to speculate on this movement is to borrow dollars, convert the proceeds to the foreign currency, lend in the foreign country, and use the proceeds from this investment to repay the dollar loan. The main effect of interest rate movements on exchange rates is through their effect on international trade.14-An Omani exporter expecting that appreciation of OMR in relative to USD. How it will affect if the Omani exporter's receipts are in USD? a. USD depreciated relative to OMR, hence the exporter receive fewer OMR b. OMR depreciated relative to OMR, hence the exporter receive fewer OMR c. None of the options d. USD appreciated relative to OMR, hence the exporter receive fewer OMRThe U.S. dollar, Norwegian krone, Swiss franc and Japanese yen often are labelled “haven currencies.” During times of international stress, each of these currencies typically can be expected to: (a) depreciate; (b) appreciate; (c) be devalued; (d) yield fewer units of foreign currencies when traded in open markets.