7. Exchange rate pass-through may be defined as (a) the bid/ask spread on currency exchange rate transactions. (b) the degree to which the prices of imported and exported goods change as a result of exchange rate changes. (c) the PPP of lesser-developed countries. (d) the practice by Great Britain of maintaining the relative strength of the currencies of the Commonwealth countries under the current floating exchange rate regime. 8. A foreign currency ________ gives the purchaser the right, not the obligation, to buy a given amount of foreign exchange at a fixed price per unit for a specified period. a) future b) forward c) option d) swap 9. ________ is the active buying and selling of the domestic currency against foreign currencies. a) Indirect Intervention b) Direct Intervention c) Foreign Direct Investment d) Federal Funding 10. The difference between the expected (or required) return for the market portfolio and the risk-free rate of return is referred to as: a) beta. b) the geometric mean. c) the market risk premium. d) The arithmetic mean.