12.Indicate, by clicking on the relevant boxes, whether the following statements are true or false? A...

Transcribed Image Text:

12.Indicate, by clicking on the relevant boxes, whether the following statements are true or false? A prospective merger would need to result in a company having a market share greater than 80% before it can be described as a monopoly TRUE FALSE A government may intervene to weaken its country's exchange rate in order to eliminate a balance of payments deficit TRUE FALSE A relatively high rate of domestic inflation will lead to a strengthening currency TRUE FALSE Government fiscal policy involves the management of interest rates TRUE FALSE 13.It is true that a government may intervene to weaken its country's exchange rate in order to eliminate a balance of payments deficit. The other statements are false. An interest rate floor can be used to hedge an expected increase in interest rates The cost of an interest rate floor is higher than the cost of an interest rate collar CorrectIncorrect CorrectIncorrect The premium on an interest rate option is payable when it is exercised Correct Incorrect The standardised nature of interest rate futures means that over - and Correct Incorrect under hedging can be avoided 12.Indicate, by clicking on the relevant boxes, whether the following statements are true or false? A prospective merger would need to result in a company having a market share greater than 80% before it can be described as a monopoly TRUE FALSE A government may intervene to weaken its country's exchange rate in order to eliminate a balance of payments deficit TRUE FALSE A relatively high rate of domestic inflation will lead to a strengthening currency TRUE FALSE Government fiscal policy involves the management of interest rates TRUE FALSE 13.It is true that a government may intervene to weaken its country's exchange rate in order to eliminate a balance of payments deficit. The other statements are false. An interest rate floor can be used to hedge an expected increase in interest rates The cost of an interest rate floor is higher than the cost of an interest rate collar CorrectIncorrect CorrectIncorrect The premium on an interest rate option is payable when it is exercised Correct Incorrect The standardised nature of interest rate futures means that over - and Correct Incorrect under hedging can be avoided

Answer rating: 100% (QA)

Answers to Multiple Choice Questions 12 A prospective merger would need to result in a company havin... View the full answer