The Speculative Element of the Carry Trade Is That Its

question 67

Multiple Choice

The speculative element of the carry trade is that its success is based upon a belief that:

• A)there will be no adverse movement in exchange rates.
• B)liquidity is the key factor in determining interest rates.
• C)borrowing costs increase when demand for funds increases.
• D)foreign exchange rates are highly volatile.

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Definitions:

Slow Payments

Delays in the settlement of financial obligations, typically in the context of customers taking longer than agreed to pay their invoices.

Cash Receipts

The collection of cash during a period, including cash received from customers, interest, and other sources.

Change Fund

A set amount of money used for making change in cash transactions, typically reserved in a cash register.

Cash Register

A mechanical or electronic device used for registering and calculating transactions at a point of sale.