Assume That the Yen Price of One U

question 38

Multiple Choice

Assume that the yen price of one U.S.dollar rises to 80 yen and that the Bank of Japan has a target exchange rate of 75 yen per dollar.As a result, the Bank of Japan will intervene in the foreign exchange market by:

• A)selling U.S.dollars and buying yen.
• B)selling both U.S.dollars and yen.
• C)buying U.S.dollars and selling yen.
• D)buying both U.S.dollars and yen.
• E)buying U.S.Treasury securities.

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Definitions:

Noncash Investing

Investment activities that do not involve the immediate inflow or outflow of cash, such as acquiring assets through the issuance of equity.

Capital Acquisitions Ratio

A financial metric that compares total acquisitions of property, plant, and equipment with cash flow from operating activities, indicating the extent to which operating cash flows are used to finance capital expenditures.

Operating Activities

The principal revenue-producing activities of an entity and other activities that are not investing or financing activities.

Comparative Balance Sheets

Comparative balance sheets present the financial position of a business at different points in time, allowing for analysis of trends and changes.