If the Indirect Exchange Rate Between French Francs and U

question 90

Multiple Choice

If the indirect exchange rate between French Francs and U.S.Dollars is 6.8/1, then the direct exchange rate between these currencies is:

• A)$.1471/FFr
• B)$/6.8FFr
• C)FFr/$6.8
• D)FFr/$.1471

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Definitions:

Security Market Line

A graphical representation in finance that shows the expected return of assets or portfolios as a function of their risk (beta), according to the Capital Asset Pricing Model.

Expected Return

is the average return anticipated on an investment, factoring in the probability of each possible outcome.

Beta Coefficient

A measure of a stock's volatility in relation to the overall market, indicating the stock's risk compared to the market average.

Systematic Risk

The risk inherent to the entire market or market segment, indicating how fluctuations in the market can affect individual investments.