In the foreign exchange market, how does a change in expected future U.S. exchange rate affect the demand for dollars?

Q: What are foreign exchange markets? Why does the State Bank of Vietnam intervene in the foreign…

A: When economies are open to trade, they interact in international market at a specific exchange rate.

Q: Does the level of the exchange rate matter in the long run? Why or why not?

A: When a country values its currency with another country’s currency then this situation is called…

Q: How can exchange-rate targets lead to a speculativeattack on a currency?

A: The exchange rate targeting is the method by which a central bank intervenes in the market in order…

Q: what is volatility in exchange rate ?

A: Exchange rate is defined as the rate at which the currency of one country is exchange for the…

Q: Write a short note on the "Factors that influence exchange rates"

A: Exchange rate refers to the value of one currency for the purpose of conversing to another

Q: If the price of one gallon of gasoline goes down from $4.07 per gallon to $3.99 per gallon, how will…

A: The history of the U.S in the context of gasoline is that the U.S. has been the major importer of…

Q: What determines the value of a currency in the flexible exchange rate system ?

A: The exchange rate is the value of one country’s currency to the value another country’s currency.

Q: What does an increase in international reserves mean

A: International reserves are the foreign currency reserves.Foreign reserves or the international…

Q: Why is exchange rate important in International Finance? Can we get rid of Exchange rate in…

A: A. The value of the currency of one nation in terms of the currency of another nation is known as…

Q: How can an unexpected fall in exchange rates injure the financial health of a nation’s banks?

A: Exchange rate determines the price of the currency of a domestic country when it is exchanged with…

Q: a nation's currency is said to appreciate when exchange rates change so that a unit of its currency…

A: Answer: True, Explanation: If the currency of a  nation appreciates then it buys more units of…

Q: Q. Find any three saarc countries, Calculate effective exchange rate too.

A: South Asian Association for Regional Cooperation (SAARC)  founded in 1985.  Effective exchange rate…

Q: What is it that determines the relationship between spot and forward foreign exchange rates?

A: The spot exchange rate is the rate at which transactions happen currently. The forward exchange rate…

Q: Does an expectation of a stronger exchange rate in the future affect the exchange rate in the…

A: The exchange rate refers to trading account that a country charges other country for the imports and…

Q: Explain why supply of foreign currency rises in response to a rise in its exchange rate?

A: Generally in the given question, The rise in exchange rate actually denotes appreciation of foreign…

Q: What is balance of visible items in the balance of payments account called?

A: The balance of payments account of any country contains a number of components like balance of…

Q: Explain, with the use of a graph, the impact this had on the  demand and supply of dollars and the…

A: The supply and demand for currencies are the most critical factors in determining exchange rates.…

Q: How does a fall in the exchange rate cause an increase in the cost of raw imported materials?

A: The import and export of a country are affected by the exchange rates.

Q: what are some factors affecting the quantity of US dollars supplied in the foreign exchange market?

A: The foreign exchange market helps in the determination of the exchange rate for various currencies.…

Q: Why can you not borrow more foreign currency in a fixed exchange rate system?

A: A fixed exchange rate system, also defined as a pegged exchange rate, is the one in which currency's…

Q: Please explain how an increase in incomes in the United States will affect equilibrium in the…

A: This will be explained through a graph below:

Q: Exchange Rate Volatility?

A: (Q) Exchange Rate Volatility?

Q: What is South Koreas Exchange rate policy and risk?

A: The amount of one currency that a person or organization considers equal to another when purchasing…

Q: Why do exchange rates matter to companies, especially those involved with the foreign direct…

A: Exchange rate (ER) tells us how much of a currency (home) is valued against the other (foreign).…

Q: How a weak currency positively affect the economy?

A: Currency refers to a medium of exchange for goods and services. It is basically money that can be…

Q: What, then, determines exchange rates in the short run?

A: The exchange rate is determined by the market forces of demand and supply. After a certain stage,…

Q: How does interest rate affect exchange rate?

A: Interest rates are directly linked to investment. An interest rate is the cost of borrowing to the…

Q: Using the foreign exchange market (CAD/EURO), suppose price level in Canada is higher compared to…

A: Exchange rate is the rate at which national currencies are exchanged . And exchange rate is…

Q: How does the export of Canadian goods to the US benefits the Canadian exchange rate?

A: Exports are incredibly vital to trendy economies because they provide individuals and corporations…

Factor Models

Many attributes might be related to an asset's risk, including market capitalization (size), dividend yield, growth, price-earnings ratio, etc. The use of these traditional descriptors, however, presents a few problems: