Exam 6: International Finance and Trade

The bankers' acceptance is a draft drawn on and accepted by a bank rather than the importing firm.

The direct quotation method expresses the number of foreign currency units needed to buy one U.S. dollar.

For most of the remainder of the decade after the September 11th terrorist attacks

Arbitrage is the simultaneous buying of securities in one market and selling them in another to make a profit from price differences in the two markets.

_________________________ was created to help economic growth in developing countries.

An unconditional order for the payment of money from one person to another is called a(n)

The equilibrium exchange rate is the currency exchange rate where the supply and demand for a currency are in balance.

The U.S balance of payments involves all of the following except

A nation with relatively lower interest rate levels than other countries will have a relatively stronger currency.

The exporter's bank may offer considerable assistance to the exporter by

To protect against loss as a result of adverse currency fluctuations, an export firm may

Economic risk is the risk associated with possible slow or negative economic growth, as well as with the likelihood of variability.

It was created to help economic growth in developing countries.

The effect of arbitrage activities in foreign exchange markets is to

Hedging is action taken to reduce risk or insure against a possible negative outcome.

The World Bank is also called the United National International Bank.

Political risk is the risk associated with possible actions by a sovereign nation to interrupt or change the value of cash flows accruing to foreign investors.

On January 1, 1999, the euro became the official currency of all European Monetary Union members.

Commercial letter of credit are

The _______ includes all international transactions.