Which of the Following Exchange Rate Systems Is Must Susceptible

question 3

Multiple Choice

Which of the following exchange rate systems is must susceptible to speculation attack?

• A) an adjustable peg
• B) a currency board
• C) a managed float
• D) a free float

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Definitions:

Retained Earnings

The part of net earnings kept by the company instead of being paid out to its shareholders in the form of dividends.

Stock Dividend

A dividend payment made to shareholders in the form of additional shares, rather than cash, based on the proportion of shares already held.

Common Stock

A type of equity security that represents ownership in a corporation, giving shareholders the right to vote on corporate matters and receive dividends.

Dividend Payable

A liability reported on a company's balance sheet for dividends declared by the board of directors but not yet paid out to shareholders.