Question

1) The International Monetary Fund (IMF):

I. Is considered to be the international lender of last resort. True
II. Is primarily responsible for determining U.S. monetary policy and short-term interest rates.
III. Makes structural adjustment loans, which are often extended, to countries with a variety of debt-related problems.

Select one:
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III

2) How does over-the-counter (OTC) trading differ from trading on an organized exchange?

I. Requirements for trading OTC are less restrictive than on organized exchanges True
II. Trading cannot be done electronically on organized exchanges
III. No publicly-traded stocks can be offered OTC

Select one:
A. I only
B. I and II only
C. I and III only
D. II and III only
E. I, II, and III

3) An increase in the foreign interest rate causes __________ in the demand for __________ currency and the foreign currency to appreciate.

Select one:
A. an increase; domestic
B. a decrease; foreign
C. an increase; foreign
D. none of the above

Answer 1

1)	The International monetary fund is a lender to countries all across the
	world. The IMF makes structural adjustment loans to increase the
	growth potential and financial stability of countries.
	B) I and III only.
2)	OTC markets deal in small companies and many times
	these companies have been delisted from the Nasdaq.
	Companies trade OTC to avoid the administrative burden
	and costly fees that are part of the organized exchange.
	C) I and III only.
3)	When foreign interest rates increase then people will
	demand more of that foreign currency so that they can save
	in that country. The demand for that foreign currency will increase.
	C. an increase; foreign