A decrease in the foreign real interest rate will tend to cause, other things the same ________
A) a decrease in the return on dollar assets relative to foreign assets
B) an increase in the demand for dollars
C) a depreciation of the domestic currency
D) individuals to hold fewer dollar assets
B
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Denmark is not a member of the Eurozone but is a member of the ERM. What are the advantages to Denmark of NOT being a member of the Eurozone?
A) There are none. Denmark stubbornly wants to have its own currency (the krone). B) The Danish central bank loses its monetary autonomy by not joining the Eurozone. C) There are not very many transactions between Denmark and Eurozone countries, so transaction gains from membership in the Eurozone would be small for Denmark. D) The ERM allows much more exchange rate flexibility (+/- 15%) than the Eurozone.
Complete the sentence-A put option on a futures contract gives its owner:
A. The right to sell a futures contract at the strike price. B. The right to sell a futures contract at the market price. C. The right to buy a futures contract at the strike price. D. The right to buy a futures contract at the market price.