A Student Researching the AUD/USD Exchange Rate on a Particular

question 78

Multiple Choice

A student researching the AUD/USD exchange rate on a particular day is confused to find the following two quotations:
i.AUD/USD 0.5825-30
ii.USD/AUD 1.7152-67
Which of the following statements is correct?

• A) Quote i is the convention adopted in Australia and is a direct quote
• B) Quote ii is the convention adopted in Australia and is a direct quote.
• C) Quote i is the convention adopted in Australia and is an indirect quote.
• D) Quote ii is the convention adopted in Australia and is an indirect quote.

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Definitions:

Modified Duration

A measure of the sensitivity of a bond's price to changes in interest rates, reflecting how much the price is expected to change with a 1% move in rates.

Yield Change

A change in the rate of return on an investment, often used in the context of bonds to indicate a change in interest rates or bond prices.

Price Decline

A decrease in the market price of an asset or security over a certain period.

Zero-Coupon Bond

A bond that does not pay periodic interest payments and is issued at a discount to its face value, which is paid at maturity.