If the Exchange Rate Between the Australian Dollar and the British

question 10

Multiple Choice

If the exchange rate between the Australian dollar and the British pound (the price of the Australian dollar in terms of the pound) is currently 1.50, and is expected to be 1.80 in one year, then the expected rate of:

• A) appreciation of the Australian dollar is 15%.
• B) appreciation of the Australian dollar is 20%.
• C) depreciation of the Australian dollar is 15%.
• D) appreciation of the Australian dollar is 18%.
• E) depreciation of the Australian dollar is 20%.

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Definitions:

Inversion

A condition where something is turned inside out or upside down, or a genetic condition where a segment of a chromosome is reversed end to end.

Eversion

The movement of turning a body part outward or away from the center of the body.

Carpal

Pertaining to the bones of the wrist.

Carp

Large group of freshwater fish that are found in most parts of the world, often noted for their ability to thrive in various water conditions.