Related Mcqs:

1. The theory according to which the difference between expected appreciation and foreign interest must be equal to domestic interest rate, is called _____________?

   A. interest rate parity theorem
   B. appreciation parity theorem
   C. domestic parity theorem
   D. foreign interest parity theorem

2. For a foreign exchange of specific currency, the non-hedged position is classified as _____________?

   A. open position
   B. close position
   C. currency long position
   D. currency short position

3. The inflation rate in United States is added into real rate of interest to calculate ____________?

   A. quoted interest rate in United States
   B. nominal interest rate in United States
   C. interest rate in United States
   D. discount rate of country

4. The position which came in to existence because of holding assets less than liabilities is considered as ____________?

   A. net surplus in assets
   B. net surplus in liabilities
   C. net long in currency
   D. net short in currency

5. The position which came in to existence because of holding assets more than liabilities is considered as _____________?

   A. net long in currency
   B. net short in currency
   C. net surplus in assets
   D. net surplus in liabilities

6. The larger fluctuations in portfolio value of foreign exchange of financial institutions leads to ____________?

   A. greater liquidity of assets
   B. greater volatility of rates
   C. lesser volatility of rates
   D. lesser liquidity of assets

7. The reasons for smaller exposure of foreign exchange than US money center are ____________?

   A. regulations
   B. prudent individuals
   C. smaller size of assets
   D. all of the above

8. The rule which states that similar set of goods and services produced in various countries should have equal price is classified as _____________?

   A. law of similar mortgage rate
   B. law of one type manufacturing
   C. law of similar labor rules
   D. law of one price

9. The theory which considers the change in exchange rate with the fluctuations in inflation rates is classified as __________?

   A. liquidated power parity
   B. purchasing power parity
   C. selling power parity
   D. volatile power parity

10. The services such as commercial trade transactions and positions in financial investments provided by financial institutions are classified as ____________?

    A. trade services
    B. investment services
    C. agent services
    D. commercial services