Question 1

It is necessary to use a ______________ exchange rate to execute a transaction immediately.

Accepted Answer

A) real time 
B) spot 
C) statutory 
D) sanctioned 
E) bank determined 
A) real time 
B) spot 
C) statutory 
D) sanctioned 
E) bank determined

Question 2

The most important trading centers for the foreign exchange market are in

Accepted Answer

A) New York, Singapore, Tokyo 
B) San Paulo, New York, and Paris 
C) San Francisco, Tokyo, and Singapore 
D) New York, Hong Kong, and Paris 
E) London, New York, and Tokyo 
A) New York, Singapore, Tokyo 
B) San Paulo, New York, and Paris 
C) San Francisco, Tokyo, and Singapore 
D) New York, Hong Kong, and Paris 
E) London, New York, and Tokyo

Question 3

Theoretically, a country in which price inflation is running wild should expect to see its currency depreciate against that of countries in which inflation rates are lower refers to

Accepted Answer

A) buying purchase power. 
B) purchasing power parity. 
C) power similarities. 
D) comparative advantage. 
E) national competitive disadvantage 
A) buying purchase power. 
B) purchasing power parity. 
C) power similarities. 
D) comparative advantage. 
E) national competitive disadvantage

Question 4

Currency speculation typically involves the short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates.

Accepted Answer

A) True 
 B)False

Question 5

A forward exchange occurs when two parties agree to exchange currency and execute the deal at some specific date in the future.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is the currency of France?

Accepted Answer

A) Pound 
B) Deutsche mark 
C) Dollar 
D) Franc 
E) Euro 
A) Pound 
B) Deutsche mark 
C) Dollar 
D) Franc 
E) Euro

Question 7

The inevitable result of excessive growth in money supply is called

Accepted Answer

A) interest rate. 
B) price inflation. 
C) economic growth. 
D) per capita savings. 
E) wage increases 
A) interest rate. 
B) price inflation. 
C) economic growth. 
D) per capita savings. 
E) wage increases

Question 8

______________ is most likely to occur when the value of the domestic currency is depreciating rapidly because of hyperinflation.

Accepted Answer

A) Counter trade 
B) Separate trade 
C) Reciprocal trade 
D) Capital flight 
E) Run on banks 
A) Counter trade 
B) Separate trade 
C) Reciprocal trade 
D) Capital flight 
E) Run on banks

Question 9

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.What is the difference in the amount the importer receives using the forward exchange rate and the spot exchange rate.

Accepted Answer

A) 100,000 
B) 5,000 
C) 500 
D) 50 
E) 250 
A) 100,000 
B) 5,000 
C) 500 
D) 50 
E) 250

Question 10

Current estimates are that currencies worth approximately __________ trillion dollars (U.S.) were traded every day.

Accepted Answer

A) 1 
B) 200 
C) 13 
D) 4.2 
E) 4 
A) 1 
B) 200 
C) 13 
D) 4.2 
E) 4

Question 11

An efficient market has significant impediments to the free flow of goods and services.

Accepted Answer

A) True 
 B)False

Question 12

_____________ typically involves the short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates.

Accepted Answer

A) Capital venturing 
B) Currency speculation 
C) Monetary risk taking 
D) Investment contemplation 
E) Currency conversion 
A) Capital venturing 
B) Currency speculation 
C) Monetary risk taking 
D) Investment contemplation 
E) Currency conversion

Question 13

The three factors that have the most important impact on future exchange rate movement include the country's price inflation, its market philosophy, and its ______________.

Accepted Answer

A) rate of economic growth 
B) unemployment rate 
C) interest rate 
D) participation in the World Trade Organization 
E) current account balance 
A) rate of economic growth 
B) unemployment rate 
C) interest rate 
D) participation in the World Trade Organization 
E) current account balance

Question 14

Without the ____________ market, international trade and international investment on the scale that we see today would be impossible.

Accepted Answer

A) foreign exchange 
B) financial barter 
C) foreign resale 
D) monetary replacement 
E) capital market 
A) foreign exchange 
B) financial barter 
C) foreign resale 
D) monetary replacement 
E) capital market

Question 15

Although a foreign exchange transaction can involve any two currencies, most transactions involve

Accepted Answer

A) Japanese yen 
B) British pounds 
C) U.S.dollars 
D) French francs 
E) Euros 
A) Japanese yen 
B) British pounds 
C) U.S.dollars 
D) French francs 
E) Euros

Question 16

A country's currency is said to be freely convertible when neither residents nor non-residents are allowed to convert it into a foreign currency.

Accepted Answer

A) True 
 B)False

Question 17

Tourists are minor participants in

Accepted Answer

A) currency conversion exchange 
B) capital venturing. 
C) foreign traveling. 
D) FDI. 
E) foreign exchange market. 
A) currency conversion exchange 
B) capital venturing. 
C) foreign traveling. 
D) FDI. 
E) foreign exchange market.

Question 18

In an _____________ market, forward exchange rates will not be the best possible predictors of future spot exchange rates.

Accepted Answer

A) closed 
B) inefficient 
C) efficient 
D) reciprocal 
E) regulated 
A) closed 
B) inefficient 
C) efficient 
D) reciprocal 
E) regulated

Question 19

______________ determines whether the rate of growth in a country's money supply is greater than the rate of growth in output.

Accepted Answer

A) The international monetary authority 
B) Market mechanisms 
C) The private sector 
D) Government policy 
E) Demand for money 
A) The international monetary authority 
B) Market mechanisms 
C) The private sector 
D) Government policy 
E) Demand for money

Question 20

An exchange rate is simply the rate at which one currency is converted into another.

Accepted Answer

A) True 
 B)False

It is necessary to use a ______________ exchange rate to execute a transaction immediately.

The most important trading centers for the foreign exchange market are in

Theoretically, a country in which price inflation is running wild should expect to see its currency depreciate against that of countries in which inflation rates are lower refers to

Currency speculation typically involves the short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates.

A forward exchange occurs when two parties agree to exchange currency and execute the deal at some specific date in the future.

Which of the following is the currency of France?

The inevitable result of excessive growth in money supply is called

______________ is most likely to occur when the value of the domestic currency is depreciating rapidly because of hyperinflation.

Current estimates are that currencies worth approximately __________ trillion dollars (U.S.) were traded every day.

An efficient market has significant impediments to the free flow of goods and services.

_____________ typically involves the short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates.

The three factors that have the most important impact on future exchange rate movement include the country's price inflation, its market philosophy, and its ______________.

Without the ____________ market, international trade and international investment on the scale that we see today would be impossible.

Although a foreign exchange transaction can involve any two currencies, most transactions involve

A country's currency is said to be freely convertible when neither residents nor non-residents are allowed to convert it into a foreign currency.

Tourists are minor participants in

In an _____________ market, forward exchange rates will not be the best possible predictors of future spot exchange rates.

______________ determines whether the rate of growth in a country's money supply is greater than the rate of growth in output.

An exchange rate is simply the rate at which one currency is converted into another.

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

Exam 9: The Foreign Exchange Market

It is necessary to use a ______________ exchange rate to execute a transaction immediately.

The most important trading centers for the foreign exchange market are in

Theoretically, a country in which price inflation is running wild should expect to see its currency depreciate against that of countries in which inflation rates are lower refers to

Currency speculation typically involves the short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates.

A forward exchange occurs when two parties agree to exchange currency and execute the deal at some specific date in the future.

Which of the following is the currency of France?

The inevitable result of excessive growth in money supply is called

______________ is most likely to occur when the value of the domestic currency is depreciating rapidly because of hyperinflation.

Current estimates are that currencies worth approximately __________ trillion dollars (U.S.) were traded every day.

An efficient market has significant impediments to the free flow of goods and services.

_____________ typically involves the short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates.

The three factors that have the most important impact on future exchange rate movement include the country's price inflation, its market philosophy, and its ______________.

Without the ____________ market, international trade and international investment on the scale that we see today would be impossible.

Although a foreign exchange transaction can involve any two currencies, most transactions involve

A country's currency is said to be freely convertible when neither residents nor non-residents are allowed to convert it into a foreign currency.

Tourists are minor participants in

In an _____________ market, forward exchange rates will not be the best possible predictors of future spot exchange rates.

______________ determines whether the rate of growth in a country's money supply is greater than the rate of growth in output.

An exchange rate is simply the rate at which one currency is converted into another.

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