Use the Information Below to Answer the Following Questions

question 67

Multiple Choice

Use the information below to answer the following questions.
Fact 25.3.1 Aussie Dollar Hit by Interest Rate Talk
The Australian dollar fell against the U.S. dollar to its lowest value in the past two weeks. The CPI inflation rate was reported to be generally as expected but not high enough to justify previous expectations for an aggressive interest rate rise by Australia's central bank next week.
Source: Reuters, October 28, 2009
-Consider Fact 25.3.1. If Australia followed a ________ exchange rate, they would ________ Australian dollars to void the fall in the value of the Australian dollar.

• A)fixed; buy
• B)fixed; sell
• C)flexible; buy
• D)flexible sell
• E)crawling peg; sell

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Definitions:

Fair Value

A measure of the price at which an asset would change hands between willing parties, neither being under compulsion to buy or sell.

Par Value

The face value of a bond or the stock value stated in the corporate charter, which often bears no relation to its market value.

Consolidated Buildings

Consolidated buildings involve the aggregation of building assets owned by a parent company and its subsidiaries for financial reporting purposes.

Acquisition Business Combination

A transaction or deal where one company purchases or merges with another company to expand its business operations.