Question: 1. The current exchange rate is AUD 1 = USD 0.74. The central bank of Australia (RBA) increases the official cash rate by 25 basis

1. The current exchange rate is AUD 1 = USD 0.74. The central bank of Australia (RBA) increases the official cash rate by 25 basis point. Holding else equal, which is mostly likely exchange rate to result from the RBA action?

A. Appreciation of USD against AUD

B. No change to the exchange rate

C. Unable to decide

D. Appreciation of AUD against USD

2. If an FX dealer gives a quote of AUD 1 / USD 0.7510-20 it means:

A. the spread is 0.0010

B. the dealer is giving a two-way quote

C. the trader is willing to buy AUD for 75.10 US cents and sell for 75.20 US cents

D. all of the above

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