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- The current spot exchange rate between Swiss franc and the U.S. dollar is $1.077/SF and the three-month forward rate is $1.1334/SF. The speculator believes that in three months the spot rate will be $1.120/SF. Explain how the speculator with 1,000.000$ (one million U.S. dollars) should speculate in the forward market and calculate the profit to be made. Please provide a full explanation.Assume that there's an increse in US consumers' preference for Japanese automobile. Which of the following chanfes will most likedly take place in the market for dollars a) It will take more yen to purchase the same amount of dollars b) the demand for dollars will increase c) the supply for dollars will increase d) the supply and demand of dollars will decrease e) there will be no change in the foreign exchange marketA weaker U.S. dollar will likely increase demand from global buyers for U.S. wheat and beef. A. True B. False
- What is the exchange rate in terms of 1€ = $X, if 10€ can be exchanged for $5?Group of answer choices 1) There is not enough information to determine the answer. 2) 50€ 3) $0.50 4) $50The Federal reserve can directly intervene in the foreign exchange markets by: a. lowering interest rates. O b. exchanging dollars for foreign currency. O c. imposing barriers on international trade O d. increasing the inflation rate. CLEAR MY CHOICEneed answer . absuletly upvote !!!! 1) Consider the dollar-yen exchange market, where the exchange rate represents the dollar price of one yen. The US is the demand side of the market and Japan is the supply side. In each of the following cases determine whether the exchange rate increases or decreases: a) per capita income in the US increases b) per capita income in Japan increases c) US inflation is greater than Japan's inflation d) there is an increase in US interest rates.
- 6. An increase in capital inflows in South Africa will result in a (n) _________foreign currency and a (n)_______the South African Rand in the foreign exchange market. (4 marks)A Increase in the demand for; increase in the supply ofB Increase in the supply of; increase in the demand forC Shortage of; surplus ofD Surplus of; shortage ofWhat is the Foreign Exchange Markets of LG Electronics?A transfer payment is a payment made by a. foreigners, but not in exchange for a domestically produced good or service. b. government, but not in exchange for a currently produced good or service. c. firms, but not in exchange for capital equipment. d. consumers, but not in exchange for a tangible product.
- Multiple choice A surplus on the current account of the balance of payments indicates that: (1) Financial inflows are less than financial outflows;(2) Imports are greater than exports;(3) Financial inflows are greater than financial outflows;(4) Exports are greater than imports.8. All exchange rates change over time due to economic circumstances a. True b. FalseA currency swap is equivalent to a a. long-dated forward foreign exchange contract, where the forward rate is the current spot rate. b. currency option, with the exercise price equal to the current spot rate c. short-term currency futures contract d. interest rate swap, where the basis is the differential between the fixed and floating interest rates