If the Exchange Rate Changes from 100 Yen Per Dollar

question 10

Multiple Choice

If the exchange rate changes from 100 yen per dollar to 120 yen per dollar, then the yen has:

• A)depreciated
• B)appreciated
• C)devalued
• D)revalued

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Definitions:

Higher-Yield Bonds

Bonds that offer higher interest rates because they have lower credit ratings, indicating higher risk of default compared to more secure bonds.

Longer Maturities

Refers to bonds or other fixed-income securities that have a longer time until the final repayment date.

Pure Yield Pickup Swap

A strategy where an investor swaps out of one bond into another with the aim of achieving a higher yield.

Price Risk

The possibility that the value of a financial instrument or asset will fluctuate due to changes in market prices, affecting investors' returns.