Exam 9: International Financial Markets

A convertible currency is a currency accepted by both residents and non residents of a country for the payment of goods or services.

Two firms participating in a swap must use the same currency.

________ is the simultaneous purchase and sale of foreign exchange for two different dates.

The bid-ask spread in the foreign exchange market is the ________.

Scenario: ABC Software ABC Software is a producer of educational software for children below the age of twelve. The company has operations in Switzerland and would like to expand its foreign operations with a new facility in China. -If ABC Software holds a currency option to purchase Swiss francs at SF 1.67/$ in 30 days,at the end of which the exchange rate is SF1.70/$,then ABC Software ________.

The exchange rate between the euro (€)and the dollar is €0.8461/$.Which of the following is the correct direct quote on the dollar?

________ in the foreign exchange market specialize in currency futures and options transactions.

________ is the instantaneous purchase and sale of a currency in different markets for profit.

A(n)________ is a right to exchange a specific amount of a currency on a specific date at a specific rate.