If the Canadian Dollar Appreciates Relative to the Swiss Franc,then

question 41

Multiple Choice

If the Canadian dollar appreciates relative to the Swiss franc,then all of the following statements except one are true regarding the Swiss franc.Which is the exception?

• A)The franc will be less expensive to Canadians.
• B)The franc will depreciate against the dollar.
• C)The franc may remain unchanged against the pound sterling.
• D)The franc will appreciate against the dollar.
• E)The franc will buy fewer Canadian dollars.

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Definitions:

Hedge Ratio

The ratio used to calculate the number of derivatives needed to hedge a particular risk exposure.

Hedge Ratio

A ratio used to measure the proportion of exposure that is protected from risk through hedging activities.

Dollar Change

The difference in the value of a financial instrument or market index between two points in time.

Dollar Exposure

The risk associated with changes in the value of the U.S. dollar compared to other currencies in international finance.