If the Exchange Rate Changes from $1

question 181

Multiple Choice

If the exchange rate changes from $1.45 = 1 euro to $1.37 = 1 euro,then

• A)both the euro and dollar have appreciated.
• B)both the euro and dollar have depreciated.
• C)the euro has appreciated and the dollar has depreciated.
• D)the euro has depreciated and the dollar has appreciated.

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Definitions:

Accrued Interest

Interest that has been incurred but not yet paid, typically relating to bonds or loans.

Pay Off

To completely settle a debt or an obligation.

Compounded Quarterly

A method of calculating interest where the interest is added to the principal balance four times a year.

Extinguish

To put an end to something, such as a debt or obligation, by payment or other settlement.