Which One of the Following Statements Concerning Foreign Exchange Is

question 190

Multiple Choice

Which one of the following statements concerning foreign exchange is correct?

• A) The change in an exchange rate between two countries is approximately equal to the sum of the inflation rates in the two countries.
• B) The foreign exchange market is second in size only to the New York Stock Exchange.
• C) Speculators and traders tend to magnify triangle arbitrage opportunities.
• D) Importers tend to be participants in the forward markets.
• E) Absolute purchasing power parity commonly exists in the foreign exchange markets.

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Definitions:

Collateral

Under Article 9 of the Uniform Commercial Code, the property subject to a security interest.

Impair

To weaken or damage something, especially a legal right, financial value, or physical condition.

FTC Rule 433

Known as the "Holder in Due Course" rule, it protects consumers entering into a credit transaction by preserving their right to assert claims against the seller, even when the debt is sold to a third party.

HDC

Holder in Due Course; a term used in the Uniform Commercial Code referring to a person who acquires a negotiable instrument in good faith and for value, thus obtaining certain rights.