1.What do we call a market where exchange (for example, foreign exchange) takes place immediately? An...

1.What do we call a market where exchange (for example, foreign exchange) takes place immediately?

An arbitrage market

A purchasing market

A forward market

A black market

A spot market
2.What do we call a contract that trades on an organized exchange and allows the exchange of future units of one currency for future units of another currency at an agreed-upon price today?

		An exchange rate contract
		A spot contract
		A forward contract
		An arbitrage contract
		A futures contract

3.Harvey and Johanna are retired US citizens living on a fixed pension. They discover that, with the same amount of retirement income, they could live much better if they were to move to Central America. What economic theory would this story violate if true?

Interest Rate Parity

International CAPM

Arbitrage

Spot-futures Parity

Purchasing Power Parity
4.An opportunity to make profits while taking very little risk is known as what?

		Foreign exchange
		A forward market
		Arbitrage
		A black market
		Purchasing power parity

Expert Solution

jeff jeffy answered 2 years ago

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