1. What happens when the supply of euros increases? a. Yen/Euro rises b. Euro/Ye
ID: 1225964 • Letter: 1
Question
1. What happens when the supply of euros increases?
a. Yen/Euro rises
b. Euro/Yen falls
c. Euro/USD falls
d. Pound/Euro rises
e. all of the above
2. As the US becomes more energy independent, this will decrease the demand for currencies of nations that export oil to the US (Canada, Mexico, Saudi Arabia, and Brazil). What happens when demand for pesos decreases?
a. PESO/USD rises
b. USD/PESO rises
c. both a and b
d. none of the above
Key Currency Cross Rates 9:58 a.m. EDT 09/11/12 YEN DOLLAR 0.97200 77.825 13.012 0.94050 0.62321 0.77900 EURO POUND 1.2478 99.904 16.704 1.2073 SFRANC PESO CDNDLR 1.5597 124.88 20.879 1.5091 Canada Japan Mexico Switzerland U.K. Euro U.S Source: ICAP plc 1.0335 0.07470 82.749 13.835 0.01249 5.9810 0.07228 0.04789 0.05987 0.07685 80.067 13.387 0.96759 0.64116 0.80144 1.0288 See Closing Cross Rates 0.16720 0.01208 0.00801 0.01001 0.01285 0.66264 0.82828 1.0633 0.80001 1.2500 1.2837 1.6046Explanation / Answer
1. e
Explanation: When the supply of euros increases, it is similat to decrease in its price. So, whenever Euro appears in numerator, the value falls and whenever Euro appears in denominator, the value rises.
2. b
Explanation: When the demand for pesos decreases, it is similar to decrease in its price. So, USD/PESO rises (denominator falls)
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