DescriptionA system in which exchange rates are held constantA system in which exchange rates are determined by market forces, rather thangovernment interventionA system in which exchange rates are allowed to fluctuate, but are subject togovernment interventionA system in which tforeign currencyOne advantage of afreely floatingfixedcy is synchronized with the value of a particularFixedExchange Rate SystemsManagedFloatFreelyFloatingPeggedexchange rate system is that the country with such a system is less affected by inflation in other countries. DescriptionA system in which exchange rates are held constantA system in which exchange rates are determined by market forces, rather thangovernment interventionA system in which exchange rates are allowed to fluctuate, but are subject togovernment interventionA system in which the home currency is synchronized with the value of a particularforeign currencyOne advantage of aFixedExchange Rate SystemsManagedFloatFreelyFloatingPeggedexchange rate system is that the country with such a system is less affected by inflation in other countries.

A rate at which one currency exchanged for another currency is known as exchange rate system. Though…

Answered: Description A system in which exchange…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

Which of the following statement is incorrect? O Currency crisis is more likely happen under the fixed exchange rate system. O Capital flight is more likely occur under the fixed exchange rate system. Fixed exchange rate regime relied on the ability of central banks to intervene in the currency market. O China is taking free floating exchange rate system.
Question 22 Which of the following statements relating to foreign currency translation and remeasurement is correct? If a foreign entity's recording currency is not it's functional currency, but the functional currency is the reporting currency, translation using the current rate method is not required. if a foreign entity's recording currency is not it's functional currency, remeasurement into the functional currency using the temporal method is required If a foreign entity operates in a highly inflationary economcy, the reporting currency of the U.S. parent-the U.S. dollar, should be used. All of these statements are correct
All of the following typically tend to be short-term determinants of exchange rates between currency pairs, except? (a) stock market performance; (b) interest rate differentials; (c) market momentum; (d) relative inflation expectations in the pair of countries.
The law of one price The theory of purchasing power parity (PPP) states that in the long-run exchange rates between two countries adjusts so that the price of an identical good is the same when expressed in the same currency. A scanner costs £65.45 in England. The spot rate is currently $1.8967 per pound. TUUZI Ⓡ 48330378 10000 $37.96 Assuming that PPP holds true, what is the price of the scanner in the United States? $124.14 O $39.69 $34.51 ONE DORALAR BUTICO 30378 Suppose the price of the scanner in the United States was actually $136.55. Assuming no transaction costs, transportation costs, or import restrictions, what does PPP predict would happen to the demand for the scanner in the United States? O The demand for the scanner would decrease in the United States. O The demand for the scanner would increase in the United States.
W7 Q3 Smith Company is a firm specializing in financial advice for retired individuals. After some analysis, you have determined that an earnings multiplier of 7 is appropriate for this type of business. Smith’s most recent earnings totaled $261,000 and earnings per share was $5.60. What is the estimated value of the firm based on the earnings multiplier?
A target zone agreement is maintained by forcing the exchange rate not to change over time a country buying the currency that is losing value out of the range a country buying the currency that is gaining value out of the range reducing trade between countries until the rate corrects
Why the single currency eliminates exchange rate fluctuation and why is better for the countries to use the a common currency?
Why do governments intervene in the foreign exchange market? Check all that apply: To maintain exchange rate boundaries To reduce fear in financial markets To smooth out the business cycle To smooth out exchange rate movements To earn a profit for the government
A U.S. firm will be ________ by dollar _______ if its expenses are more susceptible to exchange rate movements than its revenue. A. unaffected; weakens B. benefited; strengthens C. benefited; weakens D. unaffected; strengthens
When a currency appreciates, there are always groups, in each country, who benefit from a stronger currency. What two groups would benefit from the US dollar becoming stronger (appreciating). a. Foreign Importer b. American Exporter c. American Importer d. Foreign Exporter
Exchange Rate Effects on Borrowing Explain how the appreciation of the Japanese yen against the U.S. dollar would affect the return to a U.S. firm that borrowed Japanese yen and used the proceeds for a U.S. project.
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