Exam 7: The Foreign Exchange Market

When exchange rates are quoted as the number of U.S.dollars per unit of foreign currency,it is referred to as

American terms refers to the

currency transactions are channeled through the worldwide ________ market which accounts for _______ of foreign exchange transactions.

Suppose the spot direct quotes for the pound sterling and euro are $1.3981?89 and $.1230?33,respectively.What is the direct quote for the pound in Paris?

Suppose the spot rate and forward rate for the British pound are $1.4248 and $1.4179 respectively.Assume the forward pound is selling at a 1.94% annualized discount,what is the number of days of the forward contract?

Traders on the foreign exchange market use ___________ to eliminate or cover the risk of loss on export or import orders denominated in foreign currencies.

The risk that a central bank will not make the necessary transfer of foreign currency to complete a currency settlement is known as ________ risk.

Suppose it is 1990 and the spot direct quotes for the Swedish krona and French franc are $.1395-99 and $.1130-33,respectively.What is the direct quote for the krona in Paris?

Suppose the spot direct quotes for the Italian euro and Swedish krone are $1.2509-51 and $.1201-10,respectively.What is the direct quote for the Swedish krone in Milan?

Hedgers,mostly _____________,engage in forward contracts on the foreign exchange markets to protect the home currency value of various foreign currency-denominated assets and liabilities on their balance sheets.

Suppose it is January 1980 and the $/DM exchange rate is DM1 = $.35 and the DM/FF exchange rate is FF1 = DM.31.What is the FF/$ exchange rate?

The spot and 30-day forward rates for the Dutch euro are $1.4757 and $1.48,respectively.The guilder is said to be selling at a forward

When an importer goes long in the forward market,they would be

What is the name of the foreign bank account that a trader maintains in a foreign bank and from which they would request transfer of currency to the account of another trader with whom they have concluded a transaction?

A ___________ between a bank and a customer calls for a fixed delivery date,at a fixed exchange rate for a specified amount of one currency against another currency payment.

If the direct price of the dollar is DKK5 in Copenhagen and transaction costs are .5%,then the minimum-maximum direct quotes for the Danish krone in New York are

Trading on the foreign exchange market is

Suppose the Brazilian Real is quoted at $0.9455-9510,and the Thai baht is quoted at $25.2513-3986.What is the direct quote for the Real in Bangkok?

If the direct price of the dollar is DM2.5 in 1990 Frankfurt and transaction costs were .4% of the amount transacted,then the minimum- maximum direct quotes for the DM in New York were:

Suppose pound sterling is quoted at $1.4419-36,and the Swiss franc is quoted at $0.6250-67.What is the direct quote for the pound in Zurich?