BMC UPDATED REVIEW ALL QUESTIONS AND
ANSWERS SURE A+
✔✔By what mechanism do interest rates affect currency values? - ✔✔Global investors
are attracted by higher bond yields in high interest rate countries.
✔✔Which of these headlines could move a currency pair? - ✔✔U.S. Stocks rally on
Fed's Surprise reduction of Interest Rate.
✔✔What is the most common target inflation rate for an advanced economy? - ✔✔2%
✔✔What was the primary goal of Abenomics? - ✔✔To halt the vicious cycle of deflation
✔✔Here is the vicious deflationary cycle. What step connects the lower left gray arrow
to the upper right blue arrow? - ✔✔prices decline
✔✔Were the two oil crises in the 1970s linked to deflation or inflation? - ✔✔Inflation
✔✔on June 23. 2016, the UK voted to leave the EU..... - ✔✔They are probably heavy
exporters
✔✔In early 2016, the same Germany machinery company has interest from four
prospective clients..... - ✔✔Indonesia
✔✔What is the median estimate for the number of Japanese yen per euro for calendar
year 2020? - ✔✔126
✔✔What is the difference between Norma and RBC's estimate for the Japanese
yen/euro... - ✔✔40 yen
✔✔Imagine you are a Dutch diamond dealer who sources diamonds from south africa -
✔✔EUR 4,717 more
, ✔✔Why would Jack Welch suggest putting all company plants on barges? - ✔✔To
respond quickly to changes in the currency markets.
✔✔Samsung is based in South Korea and reports in South Korean won.... - ✔✔Dollar
✔✔Legendary investor Warren Buffett said, "Gold gets dug out of the ground..... Then
we melt it down, dig another hole, bury it again and pay people to stand around
guarding it. It has no utility. Anyone watching from Mars would be scratching their
head." Based on this quotation, what quality of gold is he referring to? - ✔✔Its storage
costs
✔✔Which of the following options is the best way for investors to manage currency risk?
- ✔✔By locking in forward rates for known foreign payments.
✔✔What does the Big Mac index show? (A) - ✔✔a) How currencies may be overvalued
or undervalued
b) How the Economist magazine estimates inflation
c)How the law of one price is true of consumer products
d)How interest rates and inflation affect value
✔✔Which of the following are short-term drivers of currency valuation? (A) -
✔✔a)Surprise charges in interest rates, inflation, and trade
b)Surprise changes in interest rates, inflation, and gold
c)Surprise changes in relative prices, trade, and gold
d)Surprise changes in relative prices, inflation, and trade
✔✔By what mechanism do interest rates affect currency values? (C) - ✔✔a)High
interest rates slow an economy and make it less attractive to investors
b)Changes in interest rates directly influence the value at which a currency is pegged
c)Global investors are attracted by higher bond yields in high interest rate countries
d)High interest rates make the currency safer
✔✔According to the Big Mac index screen, which of the following four countries'
currency is the most undervalued? (D) - ✔✔a)United States
b)Thailand
c)Brazil
d)China
✔✔What generally happens when a central bank unexpectedly increases interest rates?
(D) - ✔✔a)The currency weakens, then strengthens.
b)The currency strengthens, then weakens.
c)The currency weakens
d)The currency strengthens
ANSWERS SURE A+
✔✔By what mechanism do interest rates affect currency values? - ✔✔Global investors
are attracted by higher bond yields in high interest rate countries.
✔✔Which of these headlines could move a currency pair? - ✔✔U.S. Stocks rally on
Fed's Surprise reduction of Interest Rate.
✔✔What is the most common target inflation rate for an advanced economy? - ✔✔2%
✔✔What was the primary goal of Abenomics? - ✔✔To halt the vicious cycle of deflation
✔✔Here is the vicious deflationary cycle. What step connects the lower left gray arrow
to the upper right blue arrow? - ✔✔prices decline
✔✔Were the two oil crises in the 1970s linked to deflation or inflation? - ✔✔Inflation
✔✔on June 23. 2016, the UK voted to leave the EU..... - ✔✔They are probably heavy
exporters
✔✔In early 2016, the same Germany machinery company has interest from four
prospective clients..... - ✔✔Indonesia
✔✔What is the median estimate for the number of Japanese yen per euro for calendar
year 2020? - ✔✔126
✔✔What is the difference between Norma and RBC's estimate for the Japanese
yen/euro... - ✔✔40 yen
✔✔Imagine you are a Dutch diamond dealer who sources diamonds from south africa -
✔✔EUR 4,717 more
, ✔✔Why would Jack Welch suggest putting all company plants on barges? - ✔✔To
respond quickly to changes in the currency markets.
✔✔Samsung is based in South Korea and reports in South Korean won.... - ✔✔Dollar
✔✔Legendary investor Warren Buffett said, "Gold gets dug out of the ground..... Then
we melt it down, dig another hole, bury it again and pay people to stand around
guarding it. It has no utility. Anyone watching from Mars would be scratching their
head." Based on this quotation, what quality of gold is he referring to? - ✔✔Its storage
costs
✔✔Which of the following options is the best way for investors to manage currency risk?
- ✔✔By locking in forward rates for known foreign payments.
✔✔What does the Big Mac index show? (A) - ✔✔a) How currencies may be overvalued
or undervalued
b) How the Economist magazine estimates inflation
c)How the law of one price is true of consumer products
d)How interest rates and inflation affect value
✔✔Which of the following are short-term drivers of currency valuation? (A) -
✔✔a)Surprise charges in interest rates, inflation, and trade
b)Surprise changes in interest rates, inflation, and gold
c)Surprise changes in relative prices, trade, and gold
d)Surprise changes in relative prices, inflation, and trade
✔✔By what mechanism do interest rates affect currency values? (C) - ✔✔a)High
interest rates slow an economy and make it less attractive to investors
b)Changes in interest rates directly influence the value at which a currency is pegged
c)Global investors are attracted by higher bond yields in high interest rate countries
d)High interest rates make the currency safer
✔✔According to the Big Mac index screen, which of the following four countries'
currency is the most undervalued? (D) - ✔✔a)United States
b)Thailand
c)Brazil
d)China
✔✔What generally happens when a central bank unexpectedly increases interest rates?
(D) - ✔✔a)The currency weakens, then strengthens.
b)The currency strengthens, then weakens.
c)The currency weakens
d)The currency strengthens
