Exam 6: International Finance and Trade

In recent years, the principal market for bankers' acceptances has been:

The effect of arbitrage activities in foreign exchange markets is to:

Quotations of foreign exchange rates in the many cities of the world are identical or nearly so because of:

In purchasing a claim to foreign exchange:

The international monetary system consists of institutions and mechanisms that foster international trade, manage the flow of financial capital, and determine currency exchange rates.

The Export-Import Bank is a corporation owned by the Federal Reserve Banks.

The International Bank for Reconstruction and Development (World Bank) was created to provide banking services for U.S.firms operating overseas.

A bankers' acceptance differs from a trade draft in that: Not in chapter

The currency quotation method that indicates the amount of a home country's currency needed to purchase one unit of a foreign currency is called the

Intervention by central banks in the flexible exchange rate system is called a dirty float. Not in chapter

Under conditions of interest rate parity (IRP), a country with a relatively _______ higher nominal interest rate will have its currency _______ relative to a country with a relatively _______ nominal interest rate.

An instrument through which a bank retains title to goods until they are paid for is called a (n)

When the flow of income into the United States exceeds the flow of income out of the United States, it creates a:

A contract for the purchase or sale of a currency where delivery will take place at a future date is called a forward exchange rate.

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

Holding demand constant, an increase in supply for one currency relative to another will cause its value to appreciate relative to that currency.

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

Foreign exporters are usually quite willing to accept Chinese Yuan in payment for goods and services because:

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

_________________________ was created to help economic growth in developing countries.