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Both call and put option premiums are affected by the level of the existing spot price relative to the strike price; for example, a high strike price relative to the spot price will result in a relatively high premium for a put option but a relatively low premium for a call option.

When you own ____, there is no obligation on your part; however, when you sell ____, there is an obligation on your part. (Select all that apply.)

Also known as the “central banks’ central bank,” the __________ attempts to facilitate cooperation among countries with regard to international transactions and provides assistance to countries experiencing a financial crisis.

The exchange rate mechanism (ERM) refers to the method of linking ____ currencies to each other within boundaries.

The 180-day forward rate for the euro is $1.29, while the current spot rate of the euro is $1.34. What is the annualized forward premium or discount of the euro?

According to purchasing power parity (PPP), if a foreign country’s inflation rate is below the inflation rate at home, home country consumers will increase their imports from the foreign country and foreign consumers will lower their demand for home country products. These market forces cause the foreign currency to appreciate.

Assume the Canadian dollar is equal to $.88 and the Peruvian Sol is equal to $.35.  The value of the Peruvian Sol in Canadian dollars is:

An  increase in the home country’s inflation rate relative to that of other countries would _________ the home country’s current account balance.  An increase in the value of the home country’s currency  would __________ the home country’s current account balance.

From before the financial crisis began in September of 2007 to when the crisis was over at the end of 2009, the huge expansion in the Fed’s balance sheet and the monetary base did not result in a large increase in monetary supply because

The World Bank was established to: