A Country Can Control

question 20

Multiple Choice

A country can control

• A)its flexible exchange rate.
• B)monetary policy oriented toward domestic goals.
• C)international capital movements.
• D)foreign inflationary policies.
• E)and avoid risks in international trade.

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Definitions:

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, often used in financial analyses to find an average value wherein each data point can carry a different weight.

Convexity

A measure of the curvature in the relationship between bond prices and yield, indicating how the duration of a bond changes as interest rates change.

Duration Predictions

Predictions about the length of time it will take for the price of a bond to be repaid by its internal cash flows.

Yield Falls

A situation where the yields on bonds decrease, which typically occurs when bond prices increase.