QUESTION: 89 Exam Topic: 1 Volume A

Foreign exchange rates are determined by various factors. Considering the drivers of exchange rates, which one of the following changes would most likely strengthen the value of the USD against other foreign currencies?

The expected US inflation rate increases
The global demand for US products decreases
The economic performance in the US weakens
The US current account surplus increases

Answer(s): D

Reveal Solution Next Question

QUESTION: 90 Exam Topic: 1 Volume A

As Japan ___ its budget deficits and ___ its dependence on debt, the Japanese currency, JPY, would ___ in value against other currencies.

Reduces, reduces, appreciate
Reduces, reduces, depreciate
Increases, reduces, appreciate
Reduces, increases, depreciate

Answer(s): A

Reveal Solution Next Question

QUESTION: 91 Exam Topic: 1 Volume A

For which one of the following four reasons do corporate customers use foreign exchange derivatives?

I) To lock in the current value of foreign-denominated receivables
II) To lock in the current value of foreign-denominated payables
III) To lock in the value of expected future foreign-denominated receivables
IV) To lock in the value of expected future foreign-denominated payables