problem 1: Security purchases in the United States by foreigners are:
a) Credit item in the current account.
b) Debit item in the financial account.
c) Credit item in the financial account.
d) Debit item in the current account.
problem 2: Merchandise exports minus imports equivalent the:
a) Basic balance.
b) Liquidity balance.
c) Official settlements balance.
d) Balance of trade.
problem 3: The payment of dividend by an American company to the foreign stockholder represents:
a) Debit in the U.S. financial account.
b) Credit in the U.S. current account.
c) Credit in the U.S. official reserve account.
d) Debit in the U.S. current account.
problem 4: According to the National Income Accounting Identity, the current account is equivalent to:
problem 5: If the bank is selling Euros for $0.89, then what is the implied euro price of the dollar?
problem 6: Assume that in London £/$ = 0.5 while in New York £/SF =0.2. The corresponding cross rate (SF/$) is:
problem 7: Riskless transactions to take benefit of profit opportunities due to a price differential or a yield differential in surplus of transaction costs are termed as:
a) Differential actions.
b) Cash transactions.
d) Forward transactions.
problem 8: The difference between bid (buying) rates and asks (selling) rates are termed as:
d) Forward transaction.