1.

In a FX forward to buy a foreign currency, the buyer must make

delivery of the foreign currency to the FX dealer at the expiration
date.
a. True
b. False

2. Derivative financial instruments are contracts that create rights

but not obligations.
a. True
b. False

3. When a domestic exporter desires to hedge a foreign currency

receivable using an FX forward, exporter will contract to sell a
specified number of foreign currency units
a. True
b. False

4. An expected future sales that is under contract would be

considered as a forecasted transaction
a. True
b. False

5. All derivatives are valued in the balance sheet at their fair values
a. True
b. False

6. Derivatives financial instruments are contracts that create obligations

but not rights
a. True
b. False

7. When a domestic importer desires to hedge a foreign currency

payable using an FX forward, importer will contract to sell a specified
number of foreign currency units
a. True
b. False