Question Details

The value of the Peruvian Sol in Canadian dollars 



1. Assume the Canadian dollar is equal to £0.51 and the Peruvian Sol is equal to £0.16. The value of the Peruvian Sol in Canadian dollars is:
a. about .3621 Canadian dollars.	              c. about 2.36 Canadian dollars.
b. about .3137 Canadian dollars.	              d. about 2.51 Canadian dollars.
£0.16/£0.51 = .3137

 2. _______ is not a bank characteristic important to customers in need of foreign exchange.
a. Quote competitiveness
b. Speed of execution
c. Forecasting advice
d. Advice about current market conditions
e. All of the above are important bank characteristics to customers in need of foreign exchange.

3.  LIBOR is:
a. the interest rate commonly charged for loans between banks.
b. the average inflation rate in European countries.
c. the maximum loan rate ceiling on loans in the international money market.
d. the maximum deposit rate ceiling on deposits in the international money market.
e. the maximum interest rate offered on bonds that are issued in London.

4. From 1944 to 1971, the exchange rate between any two currencies was typically:
a. fixed within narrow boundaries.
b. floating, but subject to central bank intervention.
c. floating, and not subject to central bank intervention.
d. nonexistent; that is currencies were not exchanged, but gold was used to pay for all foreign transactions.

 5. Futures contracts are typically _______; forward contracts are typically _______.
a. sold on an exchange; sold on an exchange
b. offered by commercial banks; sold on an exchange
c. sold on an exchange; offered by commercial banks
d. offered by commercial banks; offered by commercial banks



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