What was the interest rate in Thailand in 1996?

Understanding Interest Rate Discrepancies and Currency Devaluation

Interactive Video
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Business
•
10th Grade - University
•
Hard

Mia Campbell
FREE Resource
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10 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
10%
8%
15%
12%
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What role does the Thai Central Bank play in the currency exchange rate?
It allows free market determination
It increases interest rates
It pegs the exchange rate
It decreases interest rates
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
In the borrowing and lending strategy, what was the exchange rate used for converting dollars to baht?
35 Baht per dollar
25 Baht per dollar
20 Baht per dollar
30 Baht per dollar
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How much profit does the Thai financial institution make per year from the interest rate discrepancy?
$50,000
$20,000
$30,000
$40,000
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What happens to the profit if the baht devalues to 45 baht per dollar?
Profit increases
Profit remains the same
Profit decreases
Profit turns into a loss
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
If the baht devalues, how much would the Thai financial institution be able to convert 25 million baht into?
$800,000
$700,000
$600,000
$556,000
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the deficit faced by the institution when the baht devalues?
$10,000
$20,000
$15,000
$13,000
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