Interest and Exchange Rates
What is the Fisher Effect formula?
What is i = r + pi
The trade of goods and services for other goods and services
What is Countertrade?
A country's currency is said to be freely convertible when the country's government allows both residents and non-residents to ___
What is to purchase unlimited amount of a foreign currency?
The two functions Foreign Exchange Market
What is the act of converting one currency to another and providing some insurance against foreign risk?
What does the r stand for in the fisher effect formula?
what is "real rate of interest"
A market where prices reflect all available information
Free convertibility is universal?
What is false?
What does PPP stand for?
What is purchasing power parity?
What are the benefits of the International Fisher Effect?
What is allows investors and traders to analyze the impact of interest rate differentials on currency exchange rates
The exchange rate at which a foreign exchange dealer will convert one currency into another that particular day
What is Spot Exchange?
Why do goverments limit convertibility?
What is to preserve their foreign exchange reserves?
What are the 3 types of exposures?
What is transaction, translation, and economic exposure?
If the real interest rate in Japan is 10% and is only 6% in the United States which country smarter to invest in?
What is Japan
The purchase of securities in one market for immediate resale in another to profit from a price discrepancy
What is Arbitrage?
When is capital flights most likely to occur?
What is when the value of the domestic currency is depreciated rapidly?
True or false? In countries where inflation rates are expected to be high, interest rates also will be high.
What is True?
What does the economic theory tell us about interest rates?
What is that interest rates reflect expectations about likely future inflation rates.
What is movement of traders like a herd, all in the same direction and at the same time, in response to each other's perceived actions
What is Bandwagon Effect?
How can companies deal with the non-convertibility problem?
What is by engaging in counter-trade?
Why are some currencies not convertible?