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International Financial Management

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter5: Currency Derivatives

Section: Chapter Questions

Problem 32QA

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Question

Suppose that in the market for
reserves, the federal funds rate is
2.4% and the discount rate is 8%. If
the Federal Reserve Bank decides to
raise the discount rate, then the
curve should shift and
afterwards, the equilibrium rate will
O demand; rise
demand; not change
supply; rise
O supply; not change

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which one is correct please confirm? QUESTION 21 If the return on U.S. Treasury bills is 7.02%, the risk premium is 2.32%, and the inflation rate is 4.16%, then the real rate of return is ____. a. 7.02% b. 6.48% c. 4.70% d. 2.86%
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