Fixed Exchange Rate Regimes

question 56

Multiple Choice

Fixed exchange rate regimes

• A)existed prior to the nineteenth century but were then superseded by the gold standard.
• B)lower the transactions costs of buying and selling goods and assets.
• C)result in higher world interest rates.
• D)were first established by the GATT in 1971.

---

Definitions:

Stock Price

The cost of purchasing a share of a company, determined by the supply and demand in the stock market.

Time Value

The concept in finance that money available now is worth more than the same amount in the future due to its potential earning capacity.

In-The-Money

A term describing an options contract that has intrinsic value; for a call, when the underlying asset's price is above the strike price, and for a put, when it's below.

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.