Foreign Exchange And The Global Capital Markets

This question bank verified by Studydeets

Questions Bank

Introduction
International Trade and Foreign Direct Investment
Culture and Business
World Economies
Global and Regional Economic Cooperation and Integration
International Monetary System
Foreign Exchange and the Global Capital Markets
International Expansion and Global Market Opportunity Assessment
Exporting,Importing,and Global Sourcing
Strategy and International Business
Global Entrepreneurship and Intrapreneurship
Winning Through Effective,global Talent Management
Harnessing the Engine of Global Innovation
Competing Effectively Through Global Marketing,Distribution,and Supply-Chain Management
Understanding the Roles of Finance and Accounting in Global Competitive Advantage

All Questions

Question 1

Free

True/False

A company operating globally must deal in foreign currencies,as it has to pay suppliers in other countries with a currency different from its home country's currency.

Choose correct answer/s

True

False

Check answer

Question 2

Free

True/False

A company,when it expects to be paid in its own currency,must assess the risk that the buyer may not be able to pay the full amount due to currency fluctuations.

Choose correct answer/s

True

False

Check answer

Question 3

Free

True/False

Typically,the sell or the ask is always cheaper than the bid or the buy.

Choose correct answer/s

True

False

Check answer

Question 4

Free

True/False

An organization making use of the foreign exchange market can afford to ignore the rate at which a currency is bought or sold.

Choose correct answer/s

True

False

Check answer

Question 5

Free

True/False

A company's primary purpose for wanting or needing to convert currencies is to pay or receive money for goods or services.

Choose correct answer/s

True

False

Check answer

Question 6

True/False

Companies use hedging as a way to protect themselves if there is a time lag between when they bill and receive payment from a customer.

Choose correct answer/s

True

False

To unlock the question

Question 7

True/False

Non-finance companies prefer currency arbitrage and speculation while making investments,as they are not a risk and there are high gain methods of earning profits.

Choose correct answer/s

True

False

To unlock the question

Question 8

True/False

The indirect quote method follows the American terms for noting the base and quoted currency.

Choose correct answer/s

True

False

To unlock the question

Question 9

True/False

In an exchange rate quote,the base currency is typically the numerator.

Choose correct answer/s

True

False

To unlock the question

Question 10

True/False

In a direct quote,the foreign currency is a variable amount and the domestic currency is fixed at one unit.

Choose correct answer/s

True

False

To unlock the question

Question 11

True/False

In an indirect quote,the domestic currency is a variable amount and the foreign currency is fixed at one unit.

Choose correct answer/s

True

False

To unlock the question

Question 12

True/False

An organization makes use of the spot rate for making an immediate payment.The organization does not face the risk of the currency increasing or decreasing in value.

Choose correct answer/s

True

False

To unlock the question

Question 13

True/False

In the forward markets,foreign exchange is always quoted against the U.S.dollar.

Choose correct answer/s

True

False

To unlock the question

Question 14

True/False

The possibility of the trading of a currency in the forward market depends on the currency's demand in international financial markets.

Choose correct answer/s

True

False

To unlock the question

Question 15

True/False

A currency swap helps a firm to reduce its foreign exchange rate risk by simultaneously locking into the price for two transactions of a currency.

Choose correct answer/s

True

False

To unlock the question

Question 16

True/False

Currency option is a right but not a requirement and therefore parties in a currency option do not have to actually exchange the currencies if they choose not to.

Choose correct answer/s

True

False

To unlock the question

Question 17

True/False

Futures contracts are identical to forward contracts.

Choose correct answer/s

True

False

To unlock the question

Question 18

True/False

The only reason a saver puts his cash at risk in the capital market is if the returns on the investment are greater than returns on holding risk-free assets.

Choose correct answer/s

True

False

To unlock the question

Question 19

True/False

One of the primary purposes of the capital markets is creating economies of scale.

Choose correct answer/s

True

False

To unlock the question

Question 20

True/False

Companies are motivated to repay their bonds in a timely manner in order to maintain credibility in the financial market.

Choose correct answer/s

True

False

To unlock the question