Question 1
Which of the following is a major purpose of the international capital market?
◦ to reduce entrepreneurial initiatives
◦ to increase the cost of borrowing
◦ to reduce risk for lenders
◦ to reduce the money supply for borrowers
Question 2
Which of the following is applied when an American tourist exchanges dollars for the immediate receipt of Japanese yen at a Tokyo bank?
◦ the forward rate
◦ the spot rate
◦ the discount rate
◦ the prime rate