Module 14

Question 1

The difference between Country D’s nominal and real exchange rates with Country F is most closely related to: the ratio of the two countries’ _______

Answer 1

price levels

Question 2

A country pegs its currency within a margin of ±1% versus another currency or a basket that includes the currencies of its major trading or financial partners

Answer 2

In a conventional fixed peg arrangement

Question 3

Market-determined exchange rates are a characteristic of an ________ exchange rate regime.

Answer 3

independently floating

Question 4

FX buy-side investors that do not use derivatives:

Answer 4

Real money accounts

pension funds, insurance companies

Question 5

The sell-side of FC markets priimarily consist of:

Answer 5

Multinational banks

Primary dealers in currencies & originators of forward exchange contracts