FINC 5510 Part 2 Study Guide Test.

FINC 5510 Part 2 Study Guide Test. Which of the following is a way in which the euro affects markets? A. Consumers and business enjoy price transparency and increased price - based competition. B. Countries within the Euro zone enjoy cheaper transaction costs. C. Currency risks and costs related to exchange rate uncertainty are reduced. D. all of the above - CORRECT ANSWER all of the above One of the innovations introduced by Bretton Woods was the creation of the Special Drawing Right or SDR. The SDR is an international reserve asset created by the: - CORRECT ANSWER International Monetary Fund (IMF) China today is a clear example of a nation that has chosen the following policies EXCEPT: - CORRECT ANSWER full financial integration in an attempt to stimulate its domestic economy Today, the United States has been ejected from the International Monetary Fund for refusal to pay annual dues. - CORRECT ANSWER False Under the gold standard of currency exchange that existed from 1879 to 1914, an ounce of gold cost $20.67 in U.S. dollars and pound4.2474 in British pounds. Therefore, the exchange rate of pounds per dollar under this fixed exchange regime was: - CORRECT ANSWER B. pound0.2055/$. Which of the following is NOT a required convergence criteria to become a full member of the European Economic and Monetary Union (EMU)? - CORRECT ANSWER National birthrates must be at 2.0 or lower per person. The Euro currency is fixed against other currencies on the international currency exchange markets, but allows member country currencies to float against each other. - CORRECT ANSWER False Another name for the International Bank for Reconstruction and Development is: - CORRECT ANSWER the World Bank.