Question 1

The primary participants of the foreign exchange market are IMF and World Bank.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following resulted in the abandoning of the Bretton Woods system in the 1970s?

Accepted Answer

A)  The inflation rates in the United States and other developed counties were low. 
B)  The United States was not running a trade deficit. 
C)  The dollar became inconvertible into gold. 
D)  Most countries wanted to return to the gold standard system. 
A)  The inflation rates in the United States and other developed counties were low. 
B)  The United States was not running a trade deficit. 
C)  The dollar became inconvertible into gold. 
D)  Most countries wanted to return to the gold standard system.

Question 3

Hedging protects firms from spot market unpredictability.

Accepted Answer

A) True 
 B)False

Question 4

A floating exchange rate allows each country to make its own monetary policy.

Accepted Answer

A) True 
 B)False

Question 5

The post-Bretton Woods system is a system of flexible exchange rate regimes with _____.

Accepted Answer

A)  the Japanese yen as its common denominator 
B)  the American dollar as its common denominator 
C)  gold as its common denominator 
D)  no official common denominator 
A)  the Japanese yen as its common denominator 
B)  the American dollar as its common denominator 
C)  gold as its common denominator 
D)  no official common denominator

Question 6

Which of the following is true of quantitative easing?

Accepted Answer

A)  It depreciates the currency that is being printed. 
B)  It appreciates the currency that is being printed. 
C)  It increases the inflation rate in the country. 
D)  It increases the exchange value of the currency. 
A)  It depreciates the currency that is being printed. 
B)  It appreciates the currency that is being printed. 
C)  It increases the inflation rate in the country. 
D)  It increases the exchange value of the currency.

Question 7

Risk analysis of any country must include its currency risks.

Accepted Answer

A) True 
 B)False

Question 8

Compare and contrast the two primary strategies companies use to cope with the currency risks.

Accepted Answer

There are two primary strategies compani

Question 9

Which of the following is an advantage of a weak US dollar?

Accepted Answer

A)  US consumers benefit from low prices on imports. 
B)  US tourists enjoy lower prices abroad. 
C)  Foreign firms find it harder to acquire US targets. 
D)  Foreign tourists enjoy lower prices in the US. 
A)  US consumers benefit from low prices on imports. 
B)  US tourists enjoy lower prices abroad. 
C)  Foreign firms find it harder to acquire US targets. 
D)  Foreign tourists enjoy lower prices in the US.

Question 10

If one country's interest rate is high relative to other countries,the country will attract foreign funds.

Accepted Answer

A) True 
 B)False

Question 11

The International Monetary Fund offers free grants to countries depending on the stability and need of the borrower.

Accepted Answer

A) True 
 B)False

Question 12

What determines the success and failure of currency management around the globe?

Accepted Answer

From an institution-based standpoint,the

Question 13

_____ is a country's international transaction statement,which includes merchandise trade,service trade,and capital movement.

Accepted Answer

A)  Capital flight 
B)  Currency hedging 
C)  Purchasing power parity 
D)  Balance of payments 
A)  Capital flight 
B)  Currency hedging 
C)  Purchasing power parity 
D)  Balance of payments

Question 14

_____ allow participants to buy and sell currencies now for future delivery.

Accepted Answer

A)  Currency Swaps 
B)  Direct transactions 
C)  Spot transactions 
D)  Forward transactions 
A)  Currency Swaps 
B)  Direct transactions 
C)  Spot transactions 
D)  Forward transactions

Question 15

Which of the following best describes a rate where selective government intervention works hand-in-hand,allowing markets the freedom to work themselves out?

Accepted Answer

A)  Free float rate 
B)  Fixed rate 
C)  Dirty float rate 
D)  Target exchange rate 
A)  Free float rate 
B)  Fixed rate 
C)  Dirty float rate 
D)  Target exchange rate

Question 16

Strategic hedging means spreading out activities in a number of countries in different currency zones to offset the currency losses in certain regions through gains in other regions.

Accepted Answer

A) True 
 B)False

Question 17

Under the gold standard,to be able to redeem its currency in gold at a fixed price,every central bank needed to maintain gold reserves.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following foreign exchange transactions provide protection to traders and investors from being exposed to fluctuations of the spot rate?

Accepted Answer

A)  Spot transactions 
B)  Forward transactions 
C)  Direct transactions 
D)  Currency swaps 
A)  Spot transactions 
B)  Forward transactions 
C)  Direct transactions 
D)  Currency swaps

Question 19

Which of the following is the funding source for the International Monetary Fund?

Accepted Answer

A)  Member-country quota 
B)  Foreign direct investment 
C)  Subsidiary investing 
D)  Currency trading 
A)  Member-country quota 
B)  Foreign direct investment 
C)  Subsidiary investing 
D)  Currency trading

Question 20

The foreign exchange market has no central physical location and is the largest and most active market in the world.

Accepted Answer

A) True 
 B)False

The primary participants of the foreign exchange market are IMF and World Bank.

Which of the following resulted in the abandoning of the Bretton Woods system in the 1970s?

Hedging protects firms from spot market unpredictability.

A floating exchange rate allows each country to make its own monetary policy.

The post-Bretton Woods system is a system of flexible exchange rate regimes with _____.

Which of the following is true of quantitative easing?

Risk analysis of any country must include its currency risks.

Compare and contrast the two primary strategies companies use to cope with the currency risks.

Which of the following is an advantage of a weak US dollar?

If one country's interest rate is high relative to other countries,the country will attract foreign funds.

The International Monetary Fund offers free grants to countries depending on the stability and need of the borrower.

What determines the success and failure of currency management around the globe?

_____ is a country's international transaction statement,which includes merchandise trade,service trade,and capital movement.

_____ allow participants to buy and sell currencies now for future delivery.

Which of the following best describes a rate where selective government intervention works hand-in-hand,allowing markets the freedom to work themselves out?

Strategic hedging means spreading out activities in a number of countries in different currency zones to offset the currency losses in certain regions through gains in other regions.

Under the gold standard,to be able to redeem its currency in gold at a fixed price,every central bank needed to maintain gold reserves.

Which of the following foreign exchange transactions provide protection to traders and investors from being exposed to fluctuations of the spot rate?

Which of the following is the funding source for the International Monetary Fund?

The foreign exchange market has no central physical location and is the largest and most active market in the world.

Globalizing Business

Understanding Formal Institutions: Politics, Laws, and Economics

Emphasizing Informal Institutions: Cultures, Ethics, and Norms

Leveraging Resources and Capabilities

Trading Internationally

Investing Abroad Directly

Capitalizing on Global and Regional Integration

Growing and Internationalizing the Entrepreneurial Firm

Entering Foreign Markets

Managing Global Competitive Dynamics

Making Alliances and Acquisitions Work

Strategizing,Structuring,and Learning around the World

Competing on Marketing and Supply Chain Management

Managing Human Resources Globally

Financing and Governing the Corporation Globally

Managing Corporate Social Responsibility Globally

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Exam 7: Dealing with Foreign Exchange

The primary participants of the foreign exchange market are IMF and World Bank.

Which of the following resulted in the abandoning of the Bretton Woods system in the 1970s?

Hedging protects firms from spot market unpredictability.

A floating exchange rate allows each country to make its own monetary policy.

The post-Bretton Woods system is a system of flexible exchange rate regimes with _____.

Which of the following is true of quantitative easing?

Risk analysis of any country must include its currency risks.

Compare and contrast the two primary strategies companies use to cope with the currency risks.

Which of the following is an advantage of a weak US dollar?

If one country's interest rate is high relative to other countries,the country will attract foreign funds.

The International Monetary Fund offers free grants to countries depending on the stability and need of the borrower.

What determines the success and failure of currency management around the globe?

_____ is a country's international transaction statement,which includes merchandise trade,service trade,and capital movement.

_____ allow participants to buy and sell currencies now for future delivery.

Which of the following best describes a rate where selective government intervention works hand-in-hand,allowing markets the freedom to work themselves out?

Strategic hedging means spreading out activities in a number of countries in different currency zones to offset the currency losses in certain regions through gains in other regions.

Under the gold standard,to be able to redeem its currency in gold at a fixed price,every central bank needed to maintain gold reserves.

Which of the following foreign exchange transactions provide protection to traders and investors from being exposed to fluctuations of the spot rate?

Which of the following is the funding source for the International Monetary Fund?

The foreign exchange market has no central physical location and is the largest and most active market in the world.

Globalizing Business

Understanding Formal Institutions: Politics, Laws, and Economics

Emphasizing Informal Institutions: Cultures, Ethics, and Norms

Leveraging Resources and Capabilities

Trading Internationally

Investing Abroad Directly

Capitalizing on Global and Regional Integration

Growing and Internationalizing the Entrepreneurial Firm

Entering Foreign Markets

Managing Global Competitive Dynamics

Making Alliances and Acquisitions Work

Strategizing,Structuring,and Learning around the World

Competing on Marketing and Supply Chain Management

Managing Human Resources Globally

Financing and Governing the Corporation Globally

Managing Corporate Social Responsibility Globally

Filters