Exam 9: Global Foreign-Exchange Markets

The ________ is the most widely traded currency in the world.

According to 2010 surveys,the most frequently traded currency pair is the U.S. dollar and Japanese yen.

If a foreign currency is quoted in American terms (the direct quote)and the forward rate for a foreign currency is less than the spot rate,the foreign currency is selling at a ________.

Compared with a forward contract,a futures contract ________.

What are the characteristics of the forward market? Why do companies participate in the forward market? Provide an example to illustrate your answer.

In which of the following transactions is one currency swapped for another on one date and then swapped back on a future date?

A letter of credit that provides an exporter with the guarantee of another bank in addition to the importer's bank is called ________.

How does arbitrage differ from speculation?

In foreign exchange markets,reporting dealers trade more foreign exchange with other reporting dealers than with any other category of users.

A(n)________ is the price of a currency.

An irrevocable letter of credit is the basis for multilateral netting.

A major challenge faced by Western Union in transferring money between the United States and Mexico is that Mexican citizens trust the banks but do not trust Western Union due to its reliance on global banks.

If Toranaga-san,who works for a Japanese trading company that operates in Japanese yen,wanted to purchase Spanish castanets from a company in Barcelona and needed euros to complete the transaction,he would use the ________ to gain access to spot euros.

In a short essay,discuss how companies use foreign exchange.

EBS and Reuters provide customers with electronic foreign exchange services as well as current market data.

Which of the following would have the LEAST influence on price setting in the foreign exchange market?

Which of the following handles the majority of all foreign exchange activities?

What is a futures contract? What institutions handle futures contracts?

In the spot market,the ________ is the difference between the bid and offer rates and is the trader's profit margin.

If a company from Country A decides to sell merchandise to a company from Country B,then the company from Country A ________.