Quiz 8

If the price of British pounds in terms of U.S. dollars is $1.80 per pound, then the price of U.S. dollars in terms of British pounds is.

£0.556 per dollar

The exchange rate set for an immediate trade is often referred to as a

Spot exchange rate

Suppose the dollar per pound exchange rate is $2 per pound while the dollar per Swiss franc exchange rate is 50 cents per franc. From the given information we can conclude that the Swiss franc per pound exchange rate is

4 francs per pound

In the foreign exchange market, what could be a possible consequence of an increase in the purchase of stocks of Toyota, a Japanese automobile firm, by U.S. residents?

The dollar will depreciate

Which of the following groups is most likely to benefit from a strengethening of the U.S. dollar against other major currencies?

U.S. consumers

How can one profit through arbitrage if the dollar per euro exchange rate in London is $2 per pound while in New York is $1.95 per pound?

Buy pounds in New York and sell them in London

Other things remaining unchanged, if American exports to Japan increase and American imports from Japan decrease, then under a floating exchange-rate system, we would expect

The U.S. dollars to appreciate

Under a floating exchange-rate system, everything remains constant, an increase in European exports to Japan is most likely to result in

An appreciation of the euro vis-a-vis the Japanese Yen