If the Rate of Inflation in All of the World's

question 5

Multiple Choice

If the rate of inflation in all of the world's currency markets rises from 5% to 7%,this will tend to make forward exchange rates move toward

• A)smaller premiums or larger discounts in relation to the dollar
• B)larger premiums or smaller discounts in relation to the dollar
• C)no change on average
• D)parity

---

Definitions:

Polynomials

Polynomials are mathematical expressions consisting of variables and coefficients that involve only the operations of addition, subtraction, multiplication, and non-negative integer exponents of variables.

Simplified Expression

An equivalent expression that has been condensed to as few terms as possible, often by combining like terms or using algebraic properties.

Shaded Region

The area marked or colored differently than its surroundings, often used in diagrams or graphs to denote a specific area.

Expand

To simplify an expression or equation by multiplying out brackets and combining like terms.