Futures Contract and Spot Rate
PART I. MULTIPLE CHOICE QUESTIONS
1. When the value of the British pound changes from $1.50 to $1.25, then the pound has _________ and the dollar has _________. a. appreciated; appreciated b. depreciated; appreciated c. appreciated; depreciated d. depreciated; depreciated
2. When the exchange rate changes from 1.0 euros to the dollar to 0.8 euros to the dollar, then the euro has _________ and the dollar has _________. a. appreciated; appreciated b. depreciated; appreciated c. appreciated; depreciated d. depreciated; depreciated
3. If the dollar _________ from 1.2 euros per dollar to 0.8 euros per dollar, the euro _________ from 0.83 dollars to 1.25 dollars per euro. a. appreciates; appreciates b. appreciates; depreciates c. depreciates; depreciates d. depreciates; appreciates
4. If the dollar appreciates from 0.8 euros per dollar to 1.2 euros per dollar, the euro depreciates from _________ dollars to _________ dollars per euro. a. 1.25; 0.83 b. 0.83; 1.25 c. 0.67; 1.50 d. 1.50; 0.67
5. If the dollar depreciates relative to the Swiss franc, _________. a. Swiss chocolate will become more expensive in the United States. b. American computers will become less expensive in Switzerland. c. Swiss chocolate will become cheaper in the United States. d. both A and B of the above.
6. When the exchange rate for the euro changes from $1.20 to $1.00, then, holding everything else constant, the euro has _________. a. appreciated and German cars sold in the United States become more expensive. b. appreciated and German cars sold in the United States become less expensive. c. depreciated and American wheat sold in Germany becomes more expensive. d. depreciated and American wheat sold in Germany becomes less expensive.
7. If
1. When the value of the British pound changes from $1.50 to $1.25, then the pound has _________ and the dollar has _________. a. appreciated; appreciated b. depreciated; appreciated c. appreciated; depreciated d. depreciated; depreciated
2. When the exchange rate changes from 1.0 euros to the dollar to 0.8 euros to the dollar, then the euro has _________ and the dollar has _________. a. appreciated; appreciated b. depreciated; appreciated c. appreciated; depreciated d. depreciated; depreciated
3. If the dollar _________ from 1.2 euros per dollar to 0.8 euros per dollar, the euro _________ from 0.83 dollars to 1.25 dollars per euro. a. appreciates; appreciates b. appreciates; depreciates c. depreciates; depreciates d. depreciates; appreciates
4. If the dollar appreciates from 0.8 euros per dollar to 1.2 euros per dollar, the euro depreciates from _________ dollars to _________ dollars per euro. a. 1.25; 0.83 b. 0.83; 1.25 c. 0.67; 1.50 d. 1.50; 0.67
5. If the dollar depreciates relative to the Swiss franc, _________. a. Swiss chocolate will become more expensive in the United States. b. American computers will become less expensive in Switzerland. c. Swiss chocolate will become cheaper in the United States. d. both A and B of the above.
6. When the exchange rate for the euro changes from $1.20 to $1.00, then, holding everything else constant, the euro has _________. a. appreciated and German cars sold in the United States become more expensive. b. appreciated and German cars sold in the United States become less expensive. c. depreciated and American wheat sold in Germany becomes more expensive. d. depreciated and American wheat sold in Germany becomes less expensive.
7. If