Question

In: Finance

Question 11 When a currency can buy more foreign currency than before, the currency has ____....

Question 11

When a currency can buy more foreign currency than before, the currency has ____.

Select one:

a. balanced

b. depreciated

c. devalued

d. appreciated

-

Question 12

Bonds backed by real property are called

Select one:

a. convertible bonds.

b. debenture bonds.

c. mortgage bonds.

d. collateralized bonds.

-

Question 13

Question text

The ____ is a record of the international flow of funds for purchases and sales of goods, services, and securities in a given country.

Select one:

a. balance of capital accounts

b. balance of payments

c. balance in current account

d. balance of trade

-

Question 14

The exchange rate is

Select one:

a. the dollar cost of a foreign product.

b. the dollar cost of a foreign currency.

c. the supply of foreign exchange.

d. the supply of foreign currency.

-

Question 15

A contract that gives the holder the right to purchase a designated security such as common stock or bonds of the issuer anytime up to a future date at a price set today is called

Select one:

a. restrictive covenants

b. convertible

c. warrant

d. sinking fund

-

Question 16

The risk free rate is

Select one:

a. All of the above

b. the interest rate on treasury bonds.

c. free from interest rate risk.

d. free from inflation risk.

--------

Please answer All correctly!! I will rate. Thank you:)

Solutions

Expert Solution

11) d- Currency appreciation means an increase in the value of one currency in relation to another currency. Currencies appreciate against each other for a number of reasons, including government policy, interest rates, trade balances and business cycles. 12) d- collateralized bond means A firm might deposit stocks, bonds and other securities to back its bonds, The collateral must have a market value at the time of issuance at least equal to the value of the bonds. 13) d-Balance of trade (BOT) is termed as the difference between the value of a country's imports and exports for a given period. 14) b-An exchange rate is defined as the value of one nation's currency versus the currency of another nation or economic zone. For example, how many U.S. dollars does it take to buy one euro? 15) b - A convertible bond can be termed as a fixed-income corporate debt security that yields interest payments, moreover it can be converted into a predetermined number of common stock or equity shares.   16)  a- A risk-free rate is the minimum return an investor expects for any of his investment because he will not accept any additional risk unless the potential rate of return is greater than the risk-free rate.


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