Under a "Crawling Peg" System, a Country's Exchange Rate

question 34

Multiple Choice

Under a "crawling peg" system, a country's exchange rate:

• A) changes at a predetermined rate against the dollar or some other major currency.
• B) is fixed except for small, surprise changes.
• C) is determined by the central bank of another country.
• D) can change, but the changes are kept secret from the public.
• E) can fluctuate within a narrow band.

---

Definitions:

Compounded Annually

An interest calculation method where interest is added to the principal sum at the end of each year, affecting future interest calculations.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return.

Interest Rates

The percentage of a loan amount charged by a lender to a borrower for the use of assets, varying with market conditions and credit risk.

Carrying Value

The book value of an asset or liability on a balance sheet, representing the cost minus accumulated depreciation or amortization.