Discuss the below:
1 Over the last several years the U.S. has run persistent
2 Generally speaking, any transaction that results in a payment to foreigners
3 Invisible trade refers to
4 The current account balance, which is the difference between a country's exports and imports, is a component of the country's GNP. Other components of GNP include
5 The balance of payments identity is given by BCA + BKA + BRA = 0. Rearrange the identity for a country with a pure flexible exchange rate regime.
6 Under the pure flexible exchange rate regime
7 The world's largest debtor nation and creditor nation, respectively, are
8 More important than the absolute size of a country's balance-of-payments disequilibrium
9 As of 2007 gold accounting for
10 BCA stands for
11 In a pure flexible exchange rate regime, a country's central banks will not need to maintain official reserves. Under this regime
12 The capital account may be divided into three categories:
13 Suppose the McDonalds Corporation imports Canadian beef, paying for it by transferring the funds to a New York bank account kept by the Canadian Beef producer.
14 BKA stands for
15 Which of the following is most indicative of the pressure that a country's currency faces for depreciation or appreciation?
16 The current exchange rate is €1.00 = $1.50. Compute the correct balances in Bank A's correspondent account(s) with bank B if a currency trader employed at Bank A buys €100,000 from a currency trader at bank B for $150,000 using its correspondent relationship with Bank B.
17 At the wholesale level
18 Suppose a bank customer with €1,000,000 wishes to trade out of euro and into Japanese yen. The dollar-euro exchange rate is quoted as $1.60 = €1.00 and the dollar-yen exchange rate is quoted at $1.00 = ¥120. How many yen will the customer get?
19 Suppose you observe the following exchange rates: €1 = $1.50; ¥120 = $1.00. Calculate the euro-pound exchange rate.
20 The world's largest foreign exchange trading center is
21 It is common practice among currency traders worldwide to both price and trade currencies against the U.S. dollar. In fact, 2007 BIS statistics indicate that about _________ of currency trading in the world involves the U.S. dollar on one side of the transaction.
22 The Bid price
23 A recent survey of U.S. foreign exchange traders measured traders' perceptions about how fast news events that cause movements in exchange rates actually change the exchange rate. The survey respondents claim that the bulk of the adjustment to economic announcements regarding unemployment, trade deficits, inflation, GDP, and the Federal funds rate takes place within
24 It is common practice among currency traders worldwide to both price and trade currencies against the U.S. dollar. Consider a currency dealer who makes a market in 5 currencies against the dollar. If he were to supply quotes for each currency in terms of all of the others, how many quotes would he have to provide?
25 When a currency trades at a discount in the forward market
26 Suppose you observe the following exchange rates: €1 = $1.50; £1 = $2.00. Calculate the euro-pound exchange rate.
27 Most interbank trades are
28 Suppose you observe the following exchange rates: €1 = $1.60; £1 = $2.00. Calculate the euro-pound exchange rate.
29 When a currency trades at a premium in the forward market
30 The AUD/$ spot exchange rate is AUD1.60/$ and the SF/$ is SF1.25/$. The AUD/SF cross exchange rate is