|
1) The essential feature of a _______ is that it immediately fixed the rate at which a specified amount of one currency is to be delivered in exchange for a specific amount of another at a future date ? a. forward contract b. spot contract c. money contract d. bid contract
|
||||
|
2) The difference between bid (buying) rates and ask (selling) rates is called the ? a. profit b. arbitrage c. spread d. forward transaction
|
||||
|
3) The least common type of transaction in the foreign exchange is a ? a. forward transaction b. spot transaction c. swap transaction d. None of the above
|
||||
|
4) The reduction or covering of foreign exchange risk is called ? a. hedging b. speculation c. intervention d. arbitrage
|
||||
|
5) Suppose there occurs an increase in the Canadian demand for Japanese computers This results in a (an) ? a. increase in the demand for yen b. decrease in the demand for yen c. increase in the supply of yen d. decrease in the Supply of yen
|
||||
|
6) Given the foreign currency market for the Swiss franc, the supply of franc slopes upward, because as the dollar price of the franc rises ? a. America’s demand for Swiss merchandise rises b. America’s demand for Swiss merchandise falls c. Switzerland’s demand for American merchandise rises d. Switzerland’s demand for American merchandise falls
|
||||
|
7) Which financial instrument provides a buyer the right to purchase or sell a fixed amount of currency at a prearranged price, within a few days to a couple of years ? a. letter a credit b. foreign currency option c. cable transfer d. bill of exchange
|
||||
|
8) A depreciation of the dollar will have its most pronounced impact on imports if the demand for imports is ? a. constant b. inelastic c. elastic d. Unitary elastic
|
||||
|
9) In the early eighties, the Federal Reserve pursed a tight monetary policy. All else being equal. the impact of that policy was to interest rates in the United States relative to those in Europe and cause the dollar to _______ against European currencies? a. decrease; depreciate b. decrease; appreciate c. increase; depreciate d. increase; appreciate
|
||||
|
10) The supply of foreign currency tends to be ? a. upward sloping b. downward sloping c. vertical d. any of the above
|
||||
