Finance > EXAM REVIEW > Review Test Submission: Chapter 11 Quiz | Download for quality grades| (All)
Review Test Submission: Chapter 11 Quiz | Download for quality grades|
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Question 1 A ________ is the term used to describe a foreign currency agreement between two parties to exchange a given amount of one currency for another, and after a period of time, to give back t... he original amounts. Selected Answer: currency swap Correct Answer: currency swap Question 2 Under conditions of equilibrium, management would use ________ exchange rate as an unbiased predictor of future spot rates when preparing operating budgets. Selected Answer: the forward rate Correct Answer: the forward rate Question 3 From an investor's perspective, if the foreign exchange market is efficient, information about expected changes in exchange rates should be widely known and thus reflected in a firm's market value. Only ________ in exchange rates or an ________ foreign exchange market, should cause market value to change. Selected Answer: unexpected changes; inefficient Correct Answer: unexpected changes; inefficient My Institution Courses 10 out of 10 points 10 out of 10 points 10 out of 10 points Crystal Rangel 11 Question 4 Some firms use "leads" or "lags" to re-time the transfer of funds in international transactions. To benefit from changing exchange rates, firms holding a ________ currency will ________ their payments before the currency drops in value. Selected Answer: hard; lag Correct Answer: soft; lead Question 5 Which one of the following management techniques is likely to best offset the risk of long-run exposure to payables denominated in a particular foreign currency? [Show More]
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