Question 3. 3. When the Maltese lira appreciates (holding everything else consta

Question

Question 3.3. When the Maltese lira appreciates (holding everything else constant), then: (Points : 3)        Maltese falcons sold in the U.S. become more expensive
       American software sold in Malta becomes more expensive
       Maltese pottery sold in the U.S. becomes cheaper
       American toothpaste sold in Malta becomes cheaper
       Both (a) and (d) are true Question 4.4. Which of the following is not true of commercial paper? (Points : 3)        it matures in nine months (actually 270 days) or less
       it is issued by only the largest and most creditworthy corporations
       it is normally collateralized (secured) by U.S. Treasury bills
       it normally yields a higher return than T bills Question 3.3. When the Maltese lira appreciates (holding everything else constant), then: (Points : 3)        Maltese falcons sold in the U.S. become more expensive
       American software sold in Malta becomes more expensive
       Maltese pottery sold in the U.S. becomes cheaper
       American toothpaste sold in Malta becomes cheaper
       Both (a) and (d) are true

Explanation / Answer

When the Maltese lira appreciates (holding everything else constant), then Maltese falcons sold in the US become more expensive as well as American toothpaste sold in Malta becomes cheaper

Commercial paper maturity starts from 7 days to max of 1 year. Commercial papers are not usually backed by any form of collateral. Not necessary that it is issued by largest and most creditworthy corporations only. So the true statement is that normally yields a higher return than T bills

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