Question 1

The pound-dollar forward rate for pounds is $1.9068, and the spot rate is $1.9059.Pounds are selling at a ________.

Accepted Answer

A) discounted premium 
B) backward discount 
C) forward premium 
D) forward discount 
A) discounted premium 
B) backward discount 
C) forward premium 
D) forward discount

Question 2

Historically, what is the top remittance-receiving country in Latin America?

Accepted Answer

A) Brazil 
B) Mexico 
C) Uruguay 
D) Venezuela 
A) Brazil 
B) Mexico 
C) Uruguay 
D) Venezuela

Question 3

Which of the following is NOT one of the top exchanges that trade in foreign currency futures and options?

Accepted Answer

A) CME 
B) UBS 
C) NYSE Liffe 
D) NASDAQ OMX 
A) CME 
B) UBS 
C) NYSE Liffe 
D) NASDAQ OMX

Question 4

Arbitrage is the purchase of foreign currency on one market for immediate resale on a foreign market in order to profit from a price discrepancy.

Accepted Answer

A) True 
 B)False

Question 5

The U.S.dollar is so widely traded partially because the New York Stock Exchange is the biggest foreign-exchange center in the world.

Accepted Answer

A) True 
 B)False

Question 6

The Chicago Mercantile Exchange and NASDAQ are part of the OTC market.

Accepted Answer

A) True 
 B)False

Question 7

How does arbitrage differ from speculation?

Accepted Answer

A) Speculation, unlike arbitrage, is never used to protect against risk. 
B) A speculator buys or sells foreign currency with the hope that that currency will either weaken or strengthen in the future, resulting in a profit. 
C) Speculation is the purchase of foreign currency on one market for the immediate resale on another market. 
D) Arbitrage is another way to speculate for profit or protect against risk. 
A) Speculation, unlike arbitrage, is never used to protect against risk. 
B) A speculator buys or sells foreign currency with the hope that that currency will either weaken or strengthen in the future, resulting in a profit. 
C) Speculation is the purchase of foreign currency on one market for the immediate resale on another market. 
D) Arbitrage is another way to speculate for profit or protect against risk.

Question 8

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

Accepted Answer

A) will denominate the sale in its own currency since it is too hard to convert foreign currency 
B) will denominate the sale in the currency of the buyer since it is too hard for them to convert foreign currency 
C) can denominate the sale in either currency and use the foreign-exchange market to convert currency 
D) can use the OTC market to convert receipts in the future and the exchange markets to convert receipts in the spot market 
A) will denominate the sale in its own currency since it is too hard to convert foreign currency 
B) will denominate the sale in the currency of the buyer since it is too hard for them to convert foreign currency 
C) can denominate the sale in either currency and use the foreign-exchange market to convert currency 
D) can use the OTC market to convert receipts in the future and the exchange markets to convert receipts in the spot market

Question 9

What is the Bank for International Settlements? What three categories does the BIS designate in the foreign-exchange market? Briefly describe each category.

Accepted Answer

The foreign-exchange market is made up o

Question 10

Gomez Enterprises, a firm based in Mexico City, exported 1,000 circuit boards to Taylor Industries, a firm based in Chicago.Taylor received a document from Gomez that requests immediate payment for the goods.Gomez has most likely sent a ________.

Accepted Answer

A) time draft 
B) sight draft 
C) spot draft 
D) futures draft 
A) time draft 
B) sight draft 
C) spot draft 
D) futures draft

Question 11

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

Accepted Answer

A) pound 
B) yen 
C) euro 
D) U.S. dollar 
A) pound 
B) yen 
C) euro 
D) U.S. dollar

Question 12

A currency sells at a forward premium when the forward rate is greater than the spot rate.

Accepted Answer

A) True 
 B)False

Question 13

Which term refers to money denominated in the currency of another nation or group of nations?

Accepted Answer

A) foreign exchange 
B) foreign subsidy 
C) export tariff 
D) quota 
A) foreign exchange 
B) foreign subsidy 
C) export tariff 
D) quota

The pound-dollar forward rate for pounds is $1.9068, and the spot rate is $1.9059.Pounds are selling at a ________.

Historically, what is the top remittance-receiving country in Latin America?

Which of the following is NOT one of the top exchanges that trade in foreign currency futures and options?

Arbitrage is the purchase of foreign currency on one market for immediate resale on a foreign market in order to profit from a price discrepancy.

The U.S.dollar is so widely traded partially because the New York Stock Exchange is the biggest foreign-exchange center in the world.

The Chicago Mercantile Exchange and NASDAQ are part of the OTC market.

How does arbitrage differ from speculation?

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

What is the Bank for International Settlements? What three categories does the BIS designate in the foreign-exchange market? Briefly describe each category.

Gomez Enterprises, a firm based in Mexico City, exported 1,000 circuit boards to Taylor Industries, a firm based in Chicago.Taylor received a document from Gomez that requests immediate payment for the goods.Gomez has most likely sent a ________.

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

A currency sells at a forward premium when the forward rate is greater than the spot rate.

Which term refers to money denominated in the currency of another nation or group of nations?

Globalization and International Business

The Cultural Environments Facing Business

The Political and Legal Environments Facing Business

The Economic Environments Facing Businesses

Globalization and Society

International Trade and Factor-Mobility Theory

Governmental Influence on Trade

Cross-National Cooperation and Agreements

The Determination of Exchange Rates

Global Capital Markets

The Strategy of International Business

Country Evaluation and Selection

Export and Import

Direct Investment and Collaborative Strategies

The Organization of International Business

Marketing Globally

Global Manufacturing and Supply Chain Management

International Accounting and Finance Issues

International Human Resource Management

Filters

Exam 9: Global Foreign-Exchange Markets

The pound-dollar forward rate for pounds is $1.9068, and the spot rate is $1.9059.Pounds are selling at a ________.

Historically, what is the top remittance-receiving country in Latin America?

Which of the following is NOT one of the top exchanges that trade in foreign currency futures and options?

Arbitrage is the purchase of foreign currency on one market for immediate resale on a foreign market in order to profit from a price discrepancy.

The U.S.dollar is so widely traded partially because the New York Stock Exchange is the biggest foreign-exchange center in the world.

The Chicago Mercantile Exchange and NASDAQ are part of the OTC market.

How does arbitrage differ from speculation?

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

What is the Bank for International Settlements? What three categories does the BIS designate in the foreign-exchange market? Briefly describe each category.

Gomez Enterprises, a firm based in Mexico City, exported 1,000 circuit boards to Taylor Industries, a firm based in Chicago.Taylor received a document from Gomez that requests immediate payment for the goods.Gomez has most likely sent a ________.

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

A currency sells at a forward premium when the forward rate is greater than the spot rate.

Which term refers to money denominated in the currency of another nation or group of nations?

Globalization and International Business

The Cultural Environments Facing Business

The Political and Legal Environments Facing Business

The Economic Environments Facing Businesses

Globalization and Society

International Trade and Factor-Mobility Theory

Governmental Influence on Trade

Cross-National Cooperation and Agreements

The Determination of Exchange Rates

Global Capital Markets

The Strategy of International Business

Country Evaluation and Selection

Export and Import

Direct Investment and Collaborative Strategies

The Organization of International Business

Marketing Globally

Global Manufacturing and Supply Chain Management

International Accounting and Finance Issues

International Human Resource Management

Filters