Q1. Distinguish between the ask price and bid price.
Q2. Distinguish between the purchasing power parity and interest rate parity.
Q3. Describe forward rate and spot rate. Explain how are they associated?
Q4. Illustrate the meaning of arbitrage profit? Explain how does it come to existence in foreign the exchange market?
Q5. Do the forward markets lead to the spot market or the vice-versa? Describe.
Q6. Illustrate the meaning of exchange rate? Describe the factors influencing the foreign exchange rates?
Q7. What do you mean by swap point in foreign exchange? Explain how they help in determining the forward rates?
Q8. Describe the Fisher’s effect and the International Fisher Effect with reference to the exchange rate determination.
Q9. Describe and explain purchasing Power Parity Theorem with the help of illustrations.
Q10. Illustrate the meaning of covered interest arbitrage?