A Country That Introduces a _____ Commits Itself to Converting

question 126

Multiple Choice

A country that introduces a _____ commits itself to converting its domestic currency on demand into another currency at a fixed exchange rate.

• A) free float exchange rate system
• B) clean float exchange rate system
• C) pure float exchange rate system
• D) currency board
• E) gold standard

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Definitions:

Cumulative Preferred

A type of preferred stock where dividends accumulate if not paid in a given period and must be paid out before any dividends can be distributed to common stockholders.

Dividends in Arrears

Dividends owed on cumulative preferred stock that require payment prior to distributing any dividends to holders of common stock.

Par Value

The nominal or face value of a bond, or stock, as stated by the issuing company.

Treasury Stock

Shares that were issued and subsequently reacquired by the company. They are held in the company’s treasury and can be reissued or retired.