国际金融Finance_Test_Bank_8

更新时间:2023-07-24 00:41:06 阅读：评论：0

Chapter 8—Relationships among Inflation, Interest Rates, and Exchange Rates

1. Assume a two-country world: Country A and Country B. Which of the following is correct about purchasing power parity (PPP) as related to the two countries?

a.	If Country A's inflation rate exceeds Country B's inflation rate, Country A's currency will weaken.
b.	If Country A's interest rate exceeds Country B's inflation rate, Country A's currency will weaken.
c.四六级成绩查询入口身份证查询	If Country A's interest rate exceeds Country B's inflation rate, Country A's currency will strengthen.
d.	If Country B's inflation rate exceeds Country A's inflation rate, Country A's currency will weaken.

ANS: A PTS: 1

2. Given a home country and a foreign country, purchasing power parity (PPP) suggest

s that:

a.	a home currency will depreciate if the current home inflation rate exceeds the current foreign interest rate.
b.	a home currency will appreciate if the current home interest rate exceeds the current foreign interest rate.
c.	a home currency will appreciate if the current home inflation rate exceeds the current foreign inflation rate.
d.	a home currency will depreciate if the current home inflation rate exceeds the current foreign inflation rate.

ANS: D PTS: 1

3. The international Fisher effect (IFE) suggests that:

a.	a home currency will depreciate if the current home interest rate exceeds the current foreign interest rate.
b.	a home currency will appreciate if the current home interest rate exceeds the current foreign interest rate.
c.	a home currency will appreciate if the current home inflation rate exceeds the current foreign inflation rate.
d.	a home currency will depreciate if the current home inflation rate exceeds the current foreign inflation rate.

ANS: A PTS: 1

4. Becau there are a variety of factors in addition to inflation that affect exchange rates, this will:

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a.	reduce the probability that PPP shall hold.
b.	increa the probability that PPP shall hold.
c.	increa the probability the IFE will hold.
d.	B and C

ANS: A PTS: 1

5. Becau there are sometimes no substitutes for traded goods, this will:

a.	reduce the probability that PPP shall hold.
b.	increa the probability that PPP shall hold.
c.	increa the probability the IFE will hold.
d.	B and C

ANS: A PTS: 1

6. According to the IFE, if British interest rates exceed U.S. interest rates:

a.	the British pound's value will remain constant.
b.	the British pound will depreciate against the dollar.
c.	the British inflation rate will decrea.
d.	the forward rate of the British pound will contain a premium.
e.	today's forward rate of the British pound will equal today's spot rate.

ANS: B PTS: 1

7. Given a home country and a foreign country, the international Fisher effect (IFE) suggests that:

a.	the nominal interest rates of both countries are the same.
b.	the inflation rates of both countries are the same.
c.	the exchange rates of both countries will move in a similar direction against other currencies.
d.	none of the above

ANS: D PTS: 1

8. Given a home country and a foreign country, purchasing power parity suggests that:

a.	the inflation rates of both countries will be the same.
b.	the nominal interest rates of both countries will be the same.
c.	A and B
d.	none of the above

ANS: D PTS: 1

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9. If interest rates on the euro are consistently below U.S. interest rates, then for the international Fisher effect (IFE) to hold:

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a.	the value of the euro would often appreciate against the dollar.
b.	the value of the euro would often depreciate against the dollar.
c.	2013高考英语答案the value of the euro would remain constant most of the time.
d.	the value of the euro would appreciate in some periods and depreciate in other periods, but on average have a zero rate of appreciation.

ANS: A PTS: 1

10. If the international Fisher effect (IFE) did not hold bad on historical data, then this suggests that:你是人间的四月天林徽因

a.	some corporations with excess cash can lock in a guaranteed higher return on future foreign short-term investments. supreme怎么读
b.	some corporations with excess cash could have generated profits on average from covered interest arbitrage.
c.	some corporations with excess cash could have generated higher profits on average from foreign short-term investments than from domestic short-term investments.
d.	most corporations that consistently invest in foreign short-term investments would have generated the same profits (on average) as from domestic short-term investments.