The document contains multiple choice questions related to international finance topics such as foreign exchange rates, currency exchange, currency valuation, and currency risk management. Specifically, it tests knowledge on definitions of terms like currency appreciation/depreciation, types of foreign exchange exposure, hedging strategies, and theories like purchasing power parity and interest rate parity. It also includes questions on major trading currencies, institutions like the IMF, and systems like floating vs fixed exchange rates.
The document contains multiple choice questions related to international finance topics such as foreign exchange rates, currency exchange, currency valuation, and currency risk management. Specifically, it tests knowledge on definitions of terms like currency appreciation/depreciation, types of foreign exchange exposure, hedging strategies, and theories like purchasing power parity and interest rate parity. It also includes questions on major trading currencies, institutions like the IMF, and systems like floating vs fixed exchange rates.
The document contains multiple choice questions related to international finance topics such as foreign exchange rates, currency exchange, currency valuation, and currency risk management. Specifically, it tests knowledge on definitions of terms like currency appreciation/depreciation, types of foreign exchange exposure, hedging strategies, and theories like purchasing power parity and interest rate parity. It also includes questions on major trading currencies, institutions like the IMF, and systems like floating vs fixed exchange rates.
Nations that have major economic expansion attracts
The world's 4 major trading currencies are all free to float against each other. They include all of the following except The Bretton Woods system called for Which of the following is not a reason for international investment? The __________ refers to the orderly relationship between spot and forward currency exchange rates and the rates of inte In the foreign exchange market, the ________ of one country is traded for the ________ of another country. Which of the following examples definitely illustrates a depreciation of the U.S. dollar? By definition, currency appreciation occurs when Given a home country and a foreign country, purchasing power parity suggests that: If purchasing power parity were to hold even in the short run, then: Interest Rate Parity (IRP) implies that: Hedging is used by companies to: Which of the following is not a type of foreign exchange exposure? Which of the methods below may be viewed as most effective in protecting against economic exposure? When an enterprise has an unhedged receivable or payable denominated in a foreign currency and settlement of the oblig The potential for an increase or decrease in the parent's net worth and reported net income caused by a change in exchan The impact of Foreign exchange rate on firm is called as Purchasing-power parity (PPP) refers to__________. A group of European countries have formed a union and created a common currency known as __________. The spot exchange rate __________. Which of the following is an example of a natural hedge? They attempt to make risk-less profits by entering into foreign exchange transactions simultaneously in two or more marke They are those who take positions in the foreign exchange market by anticipating whether the exchange rate will go up or They are those who participate in the foreign exchange market to reduce the foreign exchange risk that they already face. They are the individuals or institutions that operates only for the sole purpose of allowing the individuals or institutions to It acts as a principal in a transaction and conduct business in their own account by committing their own funds. They acts as agents for an actual buyer/seller of foreign exchange but do not commit their own funds. _________ stand ready to buy and sell standard amounts of the currencies for which they are making a market, and seek p A _________ is the no. of units of home currency that can be exchanged for one unit of foreign currency. An _________ is the no. of units of a foreign currency that can be exchanged for one unit of home currency. A _______ is the smallest price increment a currency can make against another currency in foreign exchange trading. A _______ is the standard unit size of a foreign exchange transaction. The system of adopting the currency of another nation as a legal tender is known as ____________ . There is no intervention by the monetary authority of a country in exchange rate determination when the domestic curren Under a ___________, the government intervenes in the foreign exchange market whenever it wants the exchange rate to It involves fixing the value of a currency in relation to the value of another currency or a basket of currencies. Reduction in the value of a currency relative to another currency is known as _________ of currency And the opposite phenomenon – an increase in the value of the currency relative to another currency – is referred to ____ Any increase in currency value relative to another currency under the floating exchange rate system is called __________ A fall in a currency value relative to another currency is called __________ of currency. A Imports The British Pound The IMF to promote development To provide an expected risk-adjusted return in excess of that required. one-price rule currency; currency The dollar exchanges for 1 pound and then exchanges for 1.2 pounds the value of all currencies fall relative to gold. the home currency will appreciate if the current home inflation rate exceeds the current foreign inflation rate; real exchange rates should tend to decrease over time; Interest rates should change by an equal amount but in the opposite direction to the difference in inflation rates b Decrease the variability of tax paid Tax exposure Futures market hedging Tax exposure Translation exposure Operating Exposure the concept that the same goods should sell for the same price across countries after exchange rates are taken into the EU currency is the rate today for exchanging one currency for another for immediate delivery The prices and costs are both determined in the global market place. Arbitrageurs Arbitrageurs Arbitrageurs Facilitators Facilitators Facilitators Facilitators Direct quote Direct quote Pip Pip Nationalisation Fixed managed float system Curreny fixing Devaluation Devaluation Devaluation Devaluation B Direct Foreign Investment The Japanese Yen Floating exchange rates against the Japanese Yen To gain access to important raw materials. interest-rate parity currency; financial instruments The dollar exchanges for 250 yen and then exchanges for 275 francs the value of all currencies rise relative to gold. the home currency will depreciate if the current home interest rate exceeds the current foreign interest rate; quoted nominal exchange rates should be stable over time. The difference in interest rates in different currencies for securities of similar risk and maturity should be consist Decrease the spread between spot and forward market quotes Translation exposure Forward contract hedges Operating exposure Exchange rate exposure Transaction exposure the concept that interest rates across countries will eventually be the same the European Union is the rate today for exchanging one currency for another at a specific future date The prices are determined in the global market place and costs are determined in the domestic market place. Hedgers Hedgers Hedgers Primary dealers Primary dealers Primary dealers Primary dealers Indirect quote Indirect quote Lot Lot Internationalisation Free floated Free floated Currency pegging Revaluation Revaluation Revaluation Revaluation C Exports The Spanish Peso Fixed exchange rates against the US Dollar To produce products and/or services more efficiently than possible domestically. purchasing-power parity currency; goods The dollar exchanges for 100 francs and then exchanges for 120 yen. the value of one currency rises relative to another currency the home currency will depreciate if the current home inflation rate exceeds the current foreign inflation rate. real exchange rates should tend to increase over time; The interest rates between two countries start in equilibrium, any change in the differential rate of inflation betw Increase the variability of expected cash flows Transaction exposure Geographical diversification Accounting exposure Strategic exposure Translation exposure the orderly relationship between spot and forward currency exchange rates and the rates of interest between count the EMU is the rate today for exchanging one currency for another at a specific location on a specific future date The costs are determined in the global market place and prices are determined in the domestic market place. Speculators Speculators Speculators Brokers Brokers Brokers Brokers Both of the above Both of the above Both of the above Both of the above Dollarization Both of the above Both of the above Currency management Appreciation Appreciation Appreciation Appreciation D Privatization The US Dollar Floating exchange rates against US Dollar International investments have less political risk than domestic investments. exchange-power parity goods; goods The dollar exchanges for 120 francs and then exchanges for 100 francs the value of one currency falls relative to another currency the home currency will depreciate if the current home inflation rate exceeds the current foreign interest rate. real exchange rates should be stable over time; In the long run real interest rate between two countries will be equal Decrease the variability of expected cash flows Balance sheet exposure Money market hedges Transaction exposure Economic exposure Business risk the natural offsetting relationship provided by costs and revenues in similar market environments the Euro is the rate today for exchanging one currency for another at a specific location for immediate delivery Both b and c are examples of a natural hedge. None of the above None of the above None of the above None of the above None of the above None of the above Market Makers None of the above None of the above None of the above None of the above None of the above None of the above None of the above None of the above Depreciation Depreciation Depreciation Depreciation Answers B C C D B A D C C D B D A C D A A A D A A A C B A B C D A D A B D A A B A C C D
Adjudication Order against Shri Shailesh Somabhai Patel, Ms. Nitaben Shaileshbhai Patel & Ms. Kapilaben Somabhai Patel in the matter of Riba Textiles Ltd., Supertex Industries Ltd., Aarey Drugs and Pharmaceuticals Ltd.and Winsome Textile Industries Ltd