International Economics
What are foreign exchange markets? What is their most important function? How is this function per- formed? 2
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Dominick-Salvatore-International-Economics
1.
What are foreign exchange markets? What is their most important function? How is this function per- formed? 2. What are the four different levels of participants in foreign exchange markets? What are the other functions of foreign exchange markets? 3. What is meant by the exchange rate? How is the equilibrium exchange rate determined under a flex- ible exchange rate system? 4. What is meant by a depreciation of the domestic cur- rency? an appreciation? What is the cross exchange rate? What is the effective exchange rate? 5. What is arbitrage? What is its result? What is tri- angular arbitrage? What are cross rates? 6. Why is the measure of the balance-of-payments deficit or surplus not strictly appropriate under a flexible exchange rate? 7. What is meant by a spot transaction and the spot rate? a forward transaction and the forward rate? What is meant by a forward discount? forward pre- mium? What is a currency swap? What is a foreign exchange futures? a foreign exchange option? Salvatore c14.tex V2 - 10/18/2012 1:15 P.M. Page 458 458 Foreign Exchange Markets and Exchange Rates 8. What is meant by foreign exchange risk? How can foreign exchange risks be covered in the spot, forward, futures, or options markets? Why does hedging not usually take place in the spot market? 9. What is meant by speculation? How can specu- lation take place in the spot, forward, futures, or options markets? Why does speculation not usually take place in the spot market? What is stabilizing speculation? destabilizing speculation? 10. What is interest arbitrage? uncovered interest arbi- trage? covered interest arbitrage? How is inter- est arbitrage covered in the forward market? Why does the net gain from covered interest arbi- trage tend to diminish as covered interest arbitrage continues? 11. What is meant by the foreign currency being at covered interest arbitrage parity (CIAP)? What are some of the forces that can prevent the achievement of CIAP? 12. (a) What is a Eurocurrency? (b) Why would off- shore deposits be a more appropriate term? (c) Why is the spread between lending and borrowing rates lower on Eurocurrencies than on commercial bank dollar deposits in the United States? 13. (a) Are Eurocurrencies money? (b) Do Eurobanks create money? (c) What are the most serious prob- lems created by the existence of Eurocurrencies? Download 7.1 Mb. Do'stlaringiz bilan baham: |
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