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Matching Quiz
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Match the terms on the left with the definition in the column on the right




Match:
1


hedging

2


speculating

3


forward exchange contract

4


covered international investment

5


uncovered international investment

6


covered interest differential

7


forward premium

8


long position

9


short position

10


covered interest arbitrage

11


covered interest parity

12


uncovered interest parity

13


capital controls

14


currency swap

15


George Soros

A)when the exchange rate at which anticipated investment returns will be redeemed is not determined until the trade occurs at the future spot rate.
B)a net liability position
C)government policies that limit the ability of financial investors to transfer moneys in or out of the country.
D)the condition where the forward rate of a currency is more than the spot rate by the same percentage that its interest rate is lower than the other country's interest rate.
E)the act of taking a net asset position or a net liability position in some foreign currency.
F)when a currency is expected to appreciate by as much as its interest rate is lower than the interest rate in the other country.
G)when the exchange rate at which anticipated foreign investment returns will be redeemed is determined in the present through a forward contract.
H)a net asset position
I)an agreement to exchange one currency for another on some date in the future at the forward exchange rate.
J)the difference between the rate of returns from investing money in the US at the market rate of interest or participating in the spot and forward markets for U.S. dollars and another currency.
K)buying a country's currency spot and selling it forward, while making a profit off the combination of higher interest rates in that country and any forward premium on its currency.
L)an agreement to sell a currency today with the provision that the currency will be resold later.
M)an international investment guru
N)the proportionate difference between the current forward exchange rate value of a currency and its current spot value.
O)the act of reducing or eliminating a net asset or net liability position in the foreign currency.







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