Question 1

When a Canadian.tourist in Edinburgh goes to a bank to convert her dollars in pounds, the exchange rate is the forward exchange rate.

Accepted Answer

A) True 
 B)False  False

Question 2

Which of the following is not one of the four main uses that international businesses have for the foreign exchange market?

Accepted Answer

A) International businesses use foreign exchange markets to convert money they earn in foreign currencies to their home currencies 
B) International businesses use foreign exchange markets in determining domestic wage rates 
C) International businesses use foreign exchange markets when they have spare cash that they wish to invest for short terms in money markets 
D) Currency speculation 
E) Short term money market investments 
A) International businesses use foreign exchange markets to convert money they earn in foreign currencies to their home currencies 
B) International businesses use foreign exchange markets in determining domestic wage rates 
C) International businesses use foreign exchange markets when they have spare cash that they wish to invest for short terms in money markets 
D) Currency speculation 
E) Short term money market investments B

Question 3

According to the textbook, PPP theory does not seem to be a particularly good predictor of exchange rate movements for time spans of

Accepted Answer

A) one year or less 
B) three years or less 
C) five years or less 
D) ten years or less 
E) twenty years or less 
A) one year or less 
B) three years or less 
C) five years or less 
D) ten years or less 
E) twenty years or less C

Question 4

A currency is said to be externally convertible when only non-residents may convert it into foreign currency without limitations.

Accepted Answer

A) True 
 B)False

Question 5

Rates for currency exchange quoted for 30, 90, or 180 days into the future are referred to as _____________.

Accepted Answer

A) forward exchange rates 
B) foreign exchange quotes 
C) united trade rates 
D) generic exchange quotes 
E) future exchange rates 
A) forward exchange rates 
B) foreign exchange quotes 
C) united trade rates 
D) generic exchange quotes 
E) future exchange rates

Question 6

When a tourist exchanges one currency into another, she is participating in the:

Accepted Answer

A) foreign barter market 
B) foreign exchange market 
C) foreign replacement market 
D) foreign swap market 
E) international trade exchange 
A) foreign barter market 
B) foreign exchange market 
C) foreign replacement market 
D) foreign swap market 
E) international trade exchange

Question 7

Barrick Gold use a(n) _______________ strategy to protect itself against changes in the price of gold.

Accepted Answer

A) Gold swap 
B) forward gold exchange 
C) insurance 
D) spot gold exchange 
E) gold hedging 
A) Gold swap 
B) forward gold exchange 
C) insurance 
D) spot gold exchange 
E) gold hedging

Question 8

Spot exchange rates change daily as determined by the relative demand and supply for difference currencies.

Accepted Answer

A) True 
 B)False

Question 9

Because there is no theoretical rationale for assumptions of predictability, many economists compare ______________ to fortune telling.

Accepted Answer

A) technical analysis 
B) PPP 
C) exchange rate analysis 
D) inflation rates 
E) currency speculation 
A) technical analysis 
B) PPP 
C) exchange rate analysis 
D) inflation rates 
E) currency speculation

Question 10

A forward exchange is an investment fund that not only buys financial assets but also sells them short.

Accepted Answer

A) True 
 B)False

Question 11

The ______________ is the market that enables companies based in countries that use different currencies to trade with each other.

Accepted Answer

A) World Bank 
B) foreign currency exchange 
C) foreign exchange market 
D) foreign monetary mart 
E) foreign exchange mechanism 
A) World Bank 
B) foreign currency exchange 
C) foreign exchange market 
D) foreign monetary mart 
E) foreign exchange mechanism

Question 12

The _____________ states that in competitive markets free of transportation costs and barriers to trade, identical products sold in different countries must sell for the same price when their price is expressed in terms of the same currency.

Accepted Answer

A) law of one price 
B) principle of consistent pricing 
C) model of fair pricing 
D) principle of equitable pricing 
E) law of purchasing power equity 
A) law of one price 
B) principle of consistent pricing 
C) model of fair pricing 
D) principle of equitable pricing 
E) law of purchasing power equity

Question 13

_____________ uses price and volume data to determine past trends, which are expected to continue into the future.

Accepted Answer

A) Principal investigation 
B) Primary evaluation 
C) Fundamental analysis 
D) Technical analysis 
E) Econometric analysis 
A) Principal investigation 
B) Primary evaluation 
C) Fundamental analysis 
D) Technical analysis 
E) Econometric analysis

Question 14

Explain the concept of counter trade.When does counter trade make sense? How does counter trade help solve the no convertibility problem?

Accepted Answer

Counter trade refers to a range of barte

Question 15

A(n) ______________ is purchase and sale of a given amount of foreign exchange for two different value dates, at the same time.

Accepted Answer

A) currency swap 
B) FDI 
C) economic fund 
D) short selling 
E) arbitrage group 
A) currency swap 
B) FDI 
C) economic fund 
D) short selling 
E) arbitrage group

Question 16

______________ exchange rates represent market participants' collective predictions of likely spot exchange rates at specified future dates.

Accepted Answer

A) Reciprocal 
B) Hedge 
C) Reverse 
D) Forward 
E) Future 
A) Reciprocal 
B) Hedge 
C) Reverse 
D) Forward 
E) Future

Question 17

.This reflects

Accepted Answer

A) model of fair pricing. 
B) law of one price. 
C) principle of equitable pricing. 
D) principle of consistent pricing. 
E) purchasing power equity 
A) model of fair pricing. 
B) law of one price. 
C) principle of equitable pricing. 
D) principle of consistent pricing. 
E) purchasing power equity

Question 18

Investor expectations about likely future exchange rates have a tendency to become __________?

Accepted Answer

A) the PPP 
B) speculative exchange rates 
C) self-fulfilling prophecies 
D) the IFE 
E) interest rates 
A) the PPP 
B) speculative exchange rates 
C) self-fulfilling prophecies 
D) the IFE 
E) interest rates

Question 19

Empirical evidence suggests that neither PPP theory nor the International Fisher Effect is particularly good at explaining

Accepted Answer

A) long-term movements in exchange rates. 
B) interest rates. 
C) short-term movements in exchange rates. 
D) unemployment rates. 
E) short-term wage levels 
A) long-term movements in exchange rates. 
B) interest rates. 
C) short-term movements in exchange rates. 
D) unemployment rates. 
E) short-term wage levels

Question 20

An importer enters into a 60 day forward exchange rate for converting dollars into yuan.The spot exchange rate is 5.28 yuan for 1 dollar.The forward exchange rate is 5.27 yuan for 1 dollar.How many yuan would the importer get for 50,000 dollars

Accepted Answer

A) 264,000 
B) 364,000 
C) 364,500 
D) 353,500 
E) 263,500 
A) 264,000 
B) 364,000 
C) 364,500 
D) 353,500 
E) 263,500

When a Canadian.tourist in Edinburgh goes to a bank to convert her dollars in pounds, the exchange rate is the forward exchange rate.

Which of the following is not one of the four main uses that international businesses have for the foreign exchange market?

According to the textbook, PPP theory does not seem to be a particularly good predictor of exchange rate movements for time spans of

A currency is said to be externally convertible when only non-residents may convert it into foreign currency without limitations.

Rates for currency exchange quoted for 30, 90, or 180 days into the future are referred to as _____________.

When a tourist exchanges one currency into another, she is participating in the:

Barrick Gold use a(n) _______________ strategy to protect itself against changes in the price of gold.

Spot exchange rates change daily as determined by the relative demand and supply for difference currencies.

Because there is no theoretical rationale for assumptions of predictability, many economists compare ______________ to fortune telling.

A forward exchange is an investment fund that not only buys financial assets but also sells them short.

The ______________ is the market that enables companies based in countries that use different currencies to trade with each other.

The _____________ states that in competitive markets free of transportation costs and barriers to trade, identical products sold in different countries must sell for the same price when their price is expressed in terms of the same currency.

_____________ uses price and volume data to determine past trends, which are expected to continue into the future.

Explain the concept of counter trade.When does counter trade make sense? How does counter trade help solve the no convertibility problem?

A(n) ______________ is purchase and sale of a given amount of foreign exchange for two different value dates, at the same time.

______________ exchange rates represent market participants' collective predictions of likely spot exchange rates at specified future dates.

.This reflects

Investor expectations about likely future exchange rates have a tendency to become __________?

Empirical evidence suggests that neither PPP theory nor the International Fisher Effect is particularly good at explaining

An importer enters into a 60 day forward exchange rate for converting dollars into yuan.The spot exchange rate is 5.28 yuan for 1 dollar.The forward exchange rate is 5.27 yuan for 1 dollar.How many yuan would the importer get for 50,000 dollars

Globalization

Country Differences in Political Economy

The Cultural Environment

Ethics in International Business

International Trade Theories

The Political Economy of International Trade

Foreign Direct Investment

Regional Economic Integration

The Global Monetary System

Global Strategy

Entering Foreign Markets

Exporting, Importing, and Countertrade

Global Marketing and RD

Global Production, Outsourcing, and Logistics

Global Human Resource Management

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Exam 9: The Foreign Exchange Market

When a Canadian.tourist in Edinburgh goes to a bank to convert her dollars in pounds, the exchange rate is the forward exchange rate.

Which of the following is not one of the four main uses that international businesses have for the foreign exchange market?

According to the textbook, PPP theory does not seem to be a particularly good predictor of exchange rate movements for time spans of

A currency is said to be externally convertible when only non-residents may convert it into foreign currency without limitations.

Rates for currency exchange quoted for 30, 90, or 180 days into the future are referred to as _____________.

When a tourist exchanges one currency into another, she is participating in the:

Barrick Gold use a(n) _______________ strategy to protect itself against changes in the price of gold.

Spot exchange rates change daily as determined by the relative demand and supply for difference currencies.

Because there is no theoretical rationale for assumptions of predictability, many economists compare ______________ to fortune telling.

A forward exchange is an investment fund that not only buys financial assets but also sells them short.

The ______________ is the market that enables companies based in countries that use different currencies to trade with each other.

The _____________ states that in competitive markets free of transportation costs and barriers to trade, identical products sold in different countries must sell for the same price when their price is expressed in terms of the same currency.

_____________ uses price and volume data to determine past trends, which are expected to continue into the future.

Explain the concept of counter trade.When does counter trade make sense? How does counter trade help solve the no convertibility problem?

A(n) ______________ is purchase and sale of a given amount of foreign exchange for two different value dates, at the same time.

______________ exchange rates represent market participants' collective predictions of likely spot exchange rates at specified future dates.

.This reflects

Investor expectations about likely future exchange rates have a tendency to become __________?

Empirical evidence suggests that neither PPP theory nor the International Fisher Effect is particularly good at explaining

An importer enters into a 60 day forward exchange rate for converting dollars into yuan.The spot exchange rate is 5.28 yuan for 1 dollar.The forward exchange rate is 5.27 yuan for 1 dollar.How many yuan would the importer get for 50,000 dollars

Globalization

Country Differences in Political Economy

The Cultural Environment

Ethics in International Business

International Trade Theories

The Political Economy of International Trade

Foreign Direct Investment

Regional Economic Integration

The Global Monetary System

Global Strategy

Entering Foreign Markets

Exporting, Importing, and Countertrade

Global Marketing and RD

Global Production, Outsourcing, and Logistics

Global Human Resource Management

Filters