Assume That There Are Only Two Countries in the World,the

question 20

Essay

Assume that there are only two countries in the world,the United States and Japan.What creates the demand for and supply of Japanese yen on the foreign exchange market? Name three different things that could cause the yen to appreciate in value.

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Definitions:

Available-for-sale Debt Investment

Debt securities not classified as held-to-maturity or trading securities, and can be sold in the short-term for liquidity purposes.

Fair Value

The estimated market price of an asset or liability, reflecting the amount for which it could be exchanged in a current transaction between informed, willing parties.

Income Statement

A financial report detailing a company's revenues, expenses, and net income over a specific accounting period, showing its operating performance.

Available-for-sale Security

A financial instrument held by a firm not classified as held-for-trading or held-to-maturity, and thus can be sold before maturity.