Exam 7: Dealing With Foreign Exchange

Strategic hedging means spreading out activities in a number of countries in different currency zones to offset the currency losses in certain regions through gains in other regions.

The ____ is defined as the difference between the offer price and the bid price in a foreign exchange.

Which of the following will cause a country's currency to depreciate? 

Describe what it means for a country to peg its currency to another,and give two benefits to adopting this policy.

List the five underlying building blocks that determine the supply and demand of foreign exchange.

A country's current account deficit can only be financed using its savings.

Compare and contrast the advantages and disadvantages of a strong and a weak dollar.

The _____ suggests the price for identical products in different countries would be the same,if trade barriers are absent.

The effect of investors moving in the same direction at the same time leads to a bandwagon effect.

A country highly productive in manufacturing typically generates a merchandise trade deficit.

Which of the following characterizes a country's current account? 

Which of the following is true of the bid rate in foreign exchange markets? 

_____ have specified upper or lower bounds within which the exchange rate is allowed to fluctuate.

Risk analysis of any country must include its currency risks.

The International Monetary Fund offers free grants to countries depending on the stability and need of the borrower.

_____ refers to non-financial companies spreading out its activities in different currency zones in order to offset the currency losses in certain regions through gains in other regions.

Which of the following resulted in the abandoning of the Bretton Woods system in the 1970s? 

_____ is a country's international transaction statement,which includes merchandise trade,service trade,and capital movement.

A _____ is the price of one currency,such as the dollar,in terms of another,such as the euro.

If the forward rate of the euro per dollar is higher than the spot rate,the euro has a _____.