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The highest amount a buyer of a call or a put option can lose is the call price price.

The “Ho Chi Minh Trail”

If the international Fisher effect (IFE) holds, the local investors are expected to earn the same return from investing internationally as they would from investing in their local markets.

Using Taylor’s rule, when the equilibrium real federal funds rate is 3 percent, the positive output gap is 2 percent, the target inflation rate is 1 percent, and the actual inflation rate is 2 percent, the nominal federal funds rate target should be   Federal funds rate target = inflation rate + equilibrium real fed funds rate + ½ (inflation gap) + ½ (output gap)                                                                                                            

The discount rate is kept ________ the federal funds rate because the Fed prefers that ________.

Assume that the inflation rate in Singapore is 3%, while the inflation rate in the U.S. is 8%. According to PPP, the Singapore dollar should ____ by ____%.

The following regression analysis was conducted for the inflation rate information and exchange rate of the British pound:   eBP = ao + a1[(1+IU.S.)/(1+IU.K.) – 1] + µ   Regression results indicate that ao = 0 and a1 = 2.  Therefore: 

The response of Britain and France in the Munich Crisis:

When workers voluntarily leave work while they look for better jobs, the resulting unemployment is called

You purchase a call option on pounds for a premium of $.03 per unit, with an exercise price of $1.64; the option will not be exercised until the expiration date, if at all. If the spot rate on the expiration date is $1.63, your net profit per unit is: