Currency and Medium Lo

 Essay in Currency and Medium Lo

Chapter '07

Foreign Currency Ventures and Hedging Foreign Exchange Risk

Multiple Choice Questions

1 ) According to the Community Trade Business, what was how big is international trade in 2008? A)$7, 1000, 000, 000 (7 billion dollars)

B)$70, 000, 000, 000 (70 billion dollars)

C)$37, 500, 000, 500 (37 billion dollars)

D)$16, 000, 000, 000, 1000 (16 trillion dollars)

Answer: D Level: Easy LO: 1

installment payments on your In the years between 1990 and 2001 when global gross home product went up 27%, what was the growth in global export products? A)25%




Answer: N Level: Channel LO: you

3. What exactly " foreign currency rate? ”

A)the value to buy another currency

B)the price to buy foreign products

C)the big difference between the price of goods within a foreign currency as well as the price within a domestic currency D)the expense to hold all monetary property in a single currency

Answer: An amount: Easy LO: 1

4. Why was presently there very little fluctuation in the foreign exchange rate in the period 1945-1973? A)This was a period if the world economic system was very stable. B)There was very little expansion in the world economic system between 1945 and 1973. C)Countries associated their forex to the U. S. dollar, which was supported by gold reserves. D)Most currencies were pegged to the United kingdom pound, which could be converted to sterling silver.

Answer: C Level: Medium LO: 2

5. The central bank of Region X acquires and sells its own forex to ensure that the currency is actually exchanged within a ratio of two: 1 while using currency of Country Con. What can we conclude about these two values? A)Country Times is using the Euro.

B)Country X offers pegged its currency for the currency of Country Con. C)Country By has an unwanted currency.

D)Country X enables its forex to drift relative to the currency of Country Sumado a.

Answer: M Level: Medium LO: 2

6. If a currency is usually allowed to increase or reduction in value in accordance with other currencies, the currency is said to: A)be pegged to another foreign currency.

B)be significantly less valuable.



Response: C Level: Easy LO: 2

7. Intended for an upcoming trip, Pat really wants to buy Euros at the neighborhood bank if the current exchange rate offered on was $1. 563 every €1. What should Pat plan to purchase €1, 1000? A)exactly $1, 563

B)more than $1, 563

C)about $640

D)less than $640

Answer: N Level: Channel LO: a couple of

8. Which will of the pursuing statements is valid about the Euro? A)It is the forex used by almost all countries inside the European Union. B)It is pegged to the U. S. dollars.

C)It may be the currency instructed to be used economic reporting beneath international accounting standards. D)None of the assertions above is valid.

Answer: M Level: Moderate LO: 1

9. The number of Japanese yen (ВҐ) needed today to get one U. S. money ($) today is called: A)the spot price.

B)the precise rate.

C)the forward level.

D)the selling rate.

Solution: A Level: Convenient LO: 2

10. The amount of U. T. dollars ($) today to acquire one U. K. pound (ВЈ) half a year from now could be called: A)the spot rate

B)the exact rate

C)the forward level

D)the prime rate

Answer: C Level: Medium LO: 2

11. What has occurred when one company arranges to buy another currency some time in the future, at an exchange price quoted today? A)The company has bought a foreign money option. B)The company features entered a forward agreement.



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