Exhibit 20-4 Imagine That There Are Only Two Nations

question 131

Multiple Choice

Exhibit 20-4 Imagine that there are only two nations in the world, Canada and Switzerland.Which of the following is true of the suppliers and demanders in this market, as represented in Exhibit 20-4?

• A)The demanders want Canadian dollars and are offering Swiss francs.
• B)The suppliers want Canadian dollars and are offering Swiss francs.
• C)Both the suppliers and the demanders are offering Canadian dollars.
• D)Both the suppliers and the demanders are offering Swiss francs.
• E)Francs are being exchanged by unknown suppliers and demanders in a money market in Switzerland; anyone could be trading.

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Definitions:

Bond Indenture

A legal contract specifying the terms and conditions under which a bond has been issued, including the interest rate and maturity date.

Restricted

Pertains to assets or securities that are not fully transferable until certain conditions have been met, often used in reference to stocks.

Bond Indenture Agreements

Legal documents specifying the rights and obligations of both the issuing company and the bondholders, including details about interest payments and the maturity date.

Dividends Low

A situation where a company chooses to distribute a relatively small portion of its earnings to shareholders as dividends.