BMC Exam| 141 Questions and
Correct Verified Answers
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
What is the most common target inflation rate for an advanced economy? (C) - ✔✔a) 3%
b) 1%
c) 2%
d) 0%
What is the median estimate for the number of Japanese yen per euro for Calendar year 2020? (D) -
✔✔a)115
b)163
c)132
d)126
, What is the primary goal of Abenomics? (B) - ✔✔a)To strengthen the yen to foster consumption of
luxury goods
b)To halt the vicious cycle of deflation
c)To reduce inflation by increasing unemployment
d)To reign in GDP by reducing business confidence
Here is the vicious deflationary cycle. What step connects the lower left gray arrow to the upper right
blue arrow? (B) - ✔✔a)Workers demand pay increases
b)Prices decline
c)Employment declines
d)Workers expect prices to increase
Were the two oil crises in the 1970s linked to deflation or inflation? (C) - ✔✔a)Deflation
b)Both deflation and inflation
c)Inflation
d)Neither deflation nor inflation
On June 23, 2016, the United Kingdom voted to leave the European Union...... (D) - ✔✔a)They are
probably heavy importers
b)Their CEOs probably voted to leave the EU
c)Their CEOs probably voted to remaining the EU
d)They are probably heavy exporters
In the early 2016, the same Germany machinery company has interest from four prospective clients
from emerging markets: Indonesia, Brazil, Russia, and South Africa..... (C) - ✔✔a)South Africa
b)Russia
c)Indonesia
d)Brazil
Correct Verified Answers
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
What is the most common target inflation rate for an advanced economy? (C) - ✔✔a) 3%
b) 1%
c) 2%
d) 0%
What is the median estimate for the number of Japanese yen per euro for Calendar year 2020? (D) -
✔✔a)115
b)163
c)132
d)126
, What is the primary goal of Abenomics? (B) - ✔✔a)To strengthen the yen to foster consumption of
luxury goods
b)To halt the vicious cycle of deflation
c)To reduce inflation by increasing unemployment
d)To reign in GDP by reducing business confidence
Here is the vicious deflationary cycle. What step connects the lower left gray arrow to the upper right
blue arrow? (B) - ✔✔a)Workers demand pay increases
b)Prices decline
c)Employment declines
d)Workers expect prices to increase
Were the two oil crises in the 1970s linked to deflation or inflation? (C) - ✔✔a)Deflation
b)Both deflation and inflation
c)Inflation
d)Neither deflation nor inflation
On June 23, 2016, the United Kingdom voted to leave the European Union...... (D) - ✔✔a)They are
probably heavy importers
b)Their CEOs probably voted to leave the EU
c)Their CEOs probably voted to remaining the EU
d)They are probably heavy exporters
In the early 2016, the same Germany machinery company has interest from four prospective clients
from emerging markets: Indonesia, Brazil, Russia, and South Africa..... (C) - ✔✔a)South Africa
b)Russia
c)Indonesia
d)Brazil
