Exchange Rates

question 63

Multiple Choice

Exchange rates:

• A)are always fixed between the currencies of two countries.
• B)fluctuate to equate the quantity of foreign exchange demanded with the quantity supplied.
• C)fluctuate to equate imports and exports.
• D)fluctuate to equate interest rates in various countries.
• E)fluctuate according to agreements between the governments of various countries.

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Definitions:

Taxable Bonds

Bonds whose interest payments are subject to federal, state, or local income taxes.

Exercise Price

The cost at which an option's holder may purchase (for a call option) or sell (for a put option) the base asset.

Put Option

A financial contract giving the holder the right, but not the obligation, to sell a specific amount of an underlying asset at a set price within a specified time.

Stock Split

An action by a company to divide its existing stock into multiple shares to boost the liquidity of the shares, although the overall value of the shares remains the same.