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

Suppose that Boeing is to receive payment in euros in 6 month and wants to engage in hedging the firm would _______ euros on the 6-month forward market in order to protect itself from a/an of the euro?

A. Sell; appreciation
B. Sell; depreciation
C. Buy; depreciation
D. Buy; appreciation

If the exchange rate is 11 Mexican pesos per U.S dollar, then it takes _______ to buy 1 peso?

A. $0.0909
B. $0.1002
C. $0.2826
D. $1.1024

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

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

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

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

If a nation’s interest rates are relatively low compared to those of other countries then the exchange value of its currency will tend to ?

A. Depreciate under a system of fixed exchange rates
B. Depreciate under a system of floating exchange rates
C. Appreciate under a system of floating exchange rates
D. Appreciate under a system of floating fixed rates

The J-curve effect refers to the observation that ?

A. Gdp usually decreases before it increases after a currency depreciation
B. The trade balance usually gets worse before it improves after a currency depreciation
C. The trade balance usually gets better before it gets worse after a currency appreciation
D. Gdp usually decreases before it increases after a currency appreciation

The supply of foreign currency tends to be ?

A. Upward sloping
B. Downward sloping
C. Vertical
D. Any of the above