Toggle sidebar menu
Learn Economics
Teach High School
Teach University
About Us
We're Hiring
My Account
Contact Us
Join Our Community of Econ Nerds
Follow us
Learn Economics
Search
Courses
See all
Principles of Economics: Microeconomics
Principles of Economics: Macroeconomics
Mastering Econometrics
Money Skills
Development Economics
Series
See all
Everyday Economics
Nobel Conversations
Economists in the Wild
Women in Economics
Econ Duel
Interactive Practice
See all
Supply and Demand
GDP
Trade
Inflation
Teach Economics
Timely News Articles for Econ Class
We scour the news and send you a weekly email packed with resources that you can use in your class.
Learn More
Free High School Teacher Trainings
Teaching techniques, resources, and professional development credit! Everything you need to make economics fun and engaging for your students.
Learn More
Learn about our mission
High School Teaching Resources
See all
By Course:
High School Economics
AP Microeconomics
AP Macroeconomics
Personal Finance
By Type:
Unit Plans
Lesson Plans
Interactive Practice
Assessments
University Teaching Resources
See all
By Course:
Principles of Microeconomics
Principles of Macroeconomics
Mastering Econometrics
Development Economics
By Type:
Assessments
Interactive Practice
Lesson Plans
Assignments
Contact Us
My Account
Toggle mobile search form
Search
Practice Questions
Uncovered Interest Parity and the Carry Trade Practice Questions
The idea of the carry trade is that you can borrow in a _______________ currency and use that money to invest in a _________________ currency.
*
a. low interest; high interest
b. high interest; low interest
c. domestic; foreign
d. foreign; domestic
The diversified carry trade differs from the simple carry trade in that investors put their money into a bundle of ________________.
*
a. high real interest rate currencies
b. high nominal interest rate currencies
c. real goods and currency
d. international goods and services
“Exchange rates go up by the stairs and down by the elevator.” What does this saying mean?
*
a. weak currencies tend to rise in value rapidly but fall slowly
b. weak currencies tend to rise in value slowly but fall rapidly
c. strong currencies tend to rise in value rapidly but fall slowly
d. strong currencies tend to rise in value slowly but fall rapidly
Uncovered interest parity differs from covered interest parity. Under uncovered interest parity:
*
a. investors disregard the spot exchange rate
b. investors do not engage in arbitrage
c. investors hedge their risk in forward markets
d. investors do not hedge their risk in forward markets
Submit
Skip to Next Lesson
Back to video
Submit
International Finance
Course
(55 videos)
Introduction to International Trade and Finance
Balance of Payments
Practice Questions
Purchasing Power Parity
Practice Questions
David Hume on the Balance of Trade
Practice Questions
Isaac Gervaise
Practice Questions
Exchange Rates
Real Exchange Rates
Practice Questions
Real and Nominal Exchange Rates
Practice Questions
Are Devaluations Contractionary?
Practice Questions
Forward Exchange Rates
Practice Questions
Covered Interest Parity
Practice Questions
Uncovered Interest Parity and the Carry Trade
Practice Questions
Speculative Attacks
Practice Questions
The “Peso Problem”
Practice Questions
Long Swings in Exchange Rates
Practice Questions
Swiss Franc Peg
Practice Questions
Bela Balassa
Practice Questions
Currency Issues
The Classical Gold Standard
Practice Questions
Gold Exchange Standard
Practice Questions
Bretton Woods
Practice Questions
Reserve Currencies
Practice Questions
Safe Haven Currencies
Practice Questions
Capital Controls
Practice Questions
Currency Manipulation
Practice Questions
Chinese Currency Manipulation
Practice Questions
Borrowing in Your Own Currency
Practice Questions
The Euro Crisis
The Three Sides of the Crisis
Practice Questions
The Case for Optimism
Practice Questions
The Case for Pessimism
Practice Questions
European Central Bank
Practice Questions
The Bailout Funds
Practice Questions
Why are high bond yields a problem?
Practice Questions
The Italian Crisis of 2013
Practice Questions
The costs of leaving the Eurozone
Practice Questions
Remarks on individual countries
Practice Questions
Currency union collapse in history
Practice Questions
Indicators for Eurozone progress
Practice Questions
Life on the precipice
Practice Questions
Will austerity work?
Practice Questions
Effects on other multilateral agreements
Practice Questions
Optimum currency areas
Practice Questions
Optimum currency areas and the Euro
Practice Questions
Why is the Euro so bland?
Tyler Cowen lecture at the Bruno Leoni Institute (Optional)
Understanding the Eurocrisis (Optional)
Iceland: Causes of the Crisis
Iceland: Collapse
International Trade Overview
Trade Imbalances
Practice Questions
Dark Matter
Practice Questions
The “Dutch Disease”
Practice Questions
Introduction to Mercantilism
Practice Questions
Home Bias
Practice Questions
Adam Smith on Mercantile Systems
Practice Questions
Adam Smith on Mercantile Conclusions
Practice Questions
Crises and Responses to Them
Asian Financial Crisis of 1997
Practice Questions
Mexico and the 2008 Financial Crisis
Sudden Stops
Practice Questions
