In the Foreign Exchange Market, a Change in Which of the Following

question 137

Multiple Choice

In the foreign exchange market, a change in which of the following will result in a movement along the demand curve for U.S. dollars?

• A) the exchange rate
• B) the U.S. interest rate
• C) the interest rate in the foreign country
• D) the expected future exchange rate

---

Definitions:

Net Present Value

A financial metric that calculates the present value of all future cash flows associated with an investment, minus the initial investment cost.

Present Value

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

Unequal Lives

A term used in capital budgeting to describe projects or investments with different durations.

Replacement Chain Method

A capital budgeting technique that compares different investment projects with unequal lifespans by calculating their equivalent annual cost.