The Exchange Rate Between the U

question 36

Multiple Choice

The exchange rate between the U.S. dollar and the Chinese yuan:

• A) resulted in a rise in Chinese buying power.
• B) declined 15% between 2005 and the financial crisis in 2008.
• C) has created a situation in which China is able to get cheap products from the United States.
• D) has been unchanged since July 2005.

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Definitions:

Coupon Payment

A periodic interest payment made to bondholders during the life of a bond.

Income Bond

A type of bond that only pays interest if the issuer has sufficient earnings to cover the interest payments.

Protective Covenants

Conditions written into financial agreements that the issuer must follow, such as restrictions on issuing more debt or making capital distributions.

Bondholders

Individuals or entities that own bonds issued by corporations or governments, entitling them to receive fixed interest payments and the return of the principal amount at maturity.