Question 1

Banks,and a few nonbank foreign exchange dealers,operate ONLY in the interbank markets.

Accepted Answer

A) True 
 B)False

Question 2

Since the global financial crisis of 2008-2009,the Chinese renminbi (yuan)has become the most widely traded currency with the U.S.dollar surpassing the euro,yen,and pound as dollar trading pairs.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is NOT a motivation identified by the authors as a function of the foreign exchange market?

Accepted Answer

A) the transfer of purchasing power between countries 
B) obtaining or providing credit for international trade transactions 
C) minimizing the risks of exchange rate changes 
D) All of the above were identified as functions of the foreign exchange market. 
A) the transfer of purchasing power between countries 
B) obtaining or providing credit for international trade transactions 
C) minimizing the risks of exchange rate changes 
D) All of the above were identified as functions of the foreign exchange market.

Question 4

Which of the following may be participants in the foreign exchange markets?

Accepted Answer

A) bank and nonbank foreign exchange dealers 
B) central banks and treasuries 
C) speculators and arbitrageurs 
D) all of the above 
A) bank and nonbank foreign exchange dealers 
B) central banks and treasuries 
C) speculators and arbitrageurs 
D) all of the above

Question 5

The United Kingdom and United States together make up nearly ________ of daily currency trading.

Accepted Answer

A) 30% 
B) 40% 
C) 50% 
D) 60% 
A) 30% 
B) 40% 
C) 50% 
D) 60%

Question 6

________ are agents who facilitate trading between dealers without themselves becoming principals in the transaction.

Accepted Answer

A) Central banks 
B) Foreign exchange brokers 
C) Arbitrageurs 
D) Foreign exchange dealers 
A) Central banks 
B) Foreign exchange brokers 
C) Arbitrageurs 
D) Foreign exchange dealers

Question 7

Dealers in the foreign exchange departments of large international banks often function as "market makers." Such dealers stand willing at all times to buy and sell those currencies in which they specialize and thus maintain an "inventory" position in those currencies.

Accepted Answer

A) True 
 B)False

Question 8

TABLE 5.1
Use the table to answer following question(s).
  
-Refer to Table 5.1.According to the information provided in the table,the 6-month yen is selling at a forward ________ of approximately ________ per annum.(Use the mid rates to make your calculations. )

Accepted Answer

A) discount;2.09% 
B) discount;2.06% 
C) premium;2.09% 
D) premium;2.06% 
A) discount;2.09% 
B) discount;2.06% 
C) premium;2.09% 
D) premium;2.06%

Question 9

The authors identify two tiers of foreign exchange markets:

Accepted Answer

A) bank and nonbank foreign exchange. 
B) commercial and investment transactions. 
C) interbank and client markets. 
D) client and retail market. 
A) bank and nonbank foreign exchange. 
B) commercial and investment transactions. 
C) interbank and client markets. 
D) client and retail market.

Banks,and a few nonbank foreign exchange dealers,operate ONLY in the interbank markets.

Since the global financial crisis of 2008-2009,the Chinese renminbi (yuan)has become the most widely traded currency with the U.S.dollar surpassing the euro,yen,and pound as dollar trading pairs.

Which of the following is NOT a motivation identified by the authors as a function of the foreign exchange market?

Which of the following may be participants in the foreign exchange markets?

The United Kingdom and United States together make up nearly ________ of daily currency trading.

________ are agents who facilitate trading between dealers without themselves becoming principals in the transaction.

Dealers in the foreign exchange departments of large international banks often function as "market makers." Such dealers stand willing at all times to buy and sell those currencies in which they specialize and thus maintain an "inventory" position in those currencies.

TABLE 5.1 Use the table to answer following question(s). -Refer to Table 5.1.According to the information provided in the table,the 6-month yen is selling at a forward of approximately per annum.(Use the mid rates to make your calculations. )

The authors identify two tiers of foreign exchange markets:

Multinational Financial Management: Opportunities and Challenges

The International Monetary System

The Balance of Payments

Financial Goals and Corporate Governance

International Parity Conditions

Foreign Currency Derivatives: Futures and Options

Interest Risk and Swaps

Foreign Exchange Rate Determination

Transaction Exposure

Translation Exposure

Operating Exposure

The Global Cost and Availability of Capital

Raising Equity and Debt Globally

Multinational Tax Management

International Trade Finance

Foreign Direct Investment and Political Risk

Multinational Capital Budgeting and Cross-Border Acquisitions

Filters

Exam 5: The Foreign Exchange Market

Banks,and a few nonbank foreign exchange dealers,operate ONLY in the interbank markets.

Since the global financial crisis of 2008-2009,the Chinese renminbi (yuan)has become the most widely traded currency with the U.S.dollar surpassing the euro,yen,and pound as dollar trading pairs.

Which of the following is NOT a motivation identified by the authors as a function of the foreign exchange market?

Which of the following may be participants in the foreign exchange markets?

The United Kingdom and United States together make up nearly ________ of daily currency trading.

________ are agents who facilitate trading between dealers without themselves becoming principals in the transaction.

Dealers in the foreign exchange departments of large international banks often function as "market makers." Such dealers stand willing at all times to buy and sell those currencies in which they specialize and thus maintain an "inventory" position in those currencies.

TABLE 5.1 Use the table to answer following question(s). -Refer to Table 5.1.According to the information provided in the table,the 6-month yen is selling at a forward ________ of approximately ________ per annum.(Use the mid rates to make your calculations. )

The authors identify two tiers of foreign exchange markets:

Multinational Financial Management: Opportunities and Challenges

The International Monetary System

The Balance of Payments

Financial Goals and Corporate Governance

International Parity Conditions

Foreign Currency Derivatives: Futures and Options

Interest Risk and Swaps

Foreign Exchange Rate Determination

Transaction Exposure

Translation Exposure

Operating Exposure

The Global Cost and Availability of Capital

Raising Equity and Debt Globally

Multinational Tax Management

International Trade Finance

Foreign Direct Investment and Political Risk

Multinational Capital Budgeting and Cross-Border Acquisitions

Filters

TABLE 5.1 Use the table to answer following question(s). -Refer to Table 5.1.According to the information provided in the table,the 6-month yen is selling at a forward of approximately per annum.(Use the mid rates to make your calculations. )