1. Which exchange-rate system does not require monetary reserves for official exchange-rate intervention?

A. Floating exchange rates

B. Pegged exchange rates

C. Managed floating exchange rates

D. Dual exchange rates

2. The Euro is _______

A. the currency of EU member countries.

B. a weighted average of the currencies of EU member countries.

C. a currency, the value of which is determined by demand and supply.

D. a currency that is only traded offshore.

3. Which of the following is a function of money?

A. a unit of account

B. a store of value

C. medium of exchange

D. All of the above are correct

4. Treasury Bonds are

A. Both a store of value and a medium of exchange.

B. A store of value, but not a medium of exchange

C. A medium of exchange, but not a store of value.

D. Neither a store of value nor a medium of exchange

5. The price that the buyer of a call option pays to acquire the option is called the

A. strike price

B. exercise price

C. execution price

D. premium

Answers:      1 (A), 2 (C), 3 (D), 4 (B), 5 (D)

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