MGT 111: International Financial Management

The term ___________ means ‘to reduce risk’

• Arbitrage

• Hedge

• Speculate

• Trade

• Not aware of

Exchange rates are determined in ____________

• Foreign exchange market

• Stock market

• Capital market

• Money market

• Not aware of

The immediate (T + 2) exchange of one currency for another is a _____________

• Forward transaction

• Spot transaction

• Money transaction

• Exchange transaction

• Not aware of

___________ states that exchange rate between currencies is directly affected by their interest rate.

• IRP Theory

• PPP theory

• Fishers parity theory

• Selling theory

• Not aware of

The risk of an exchange rate changing between the transaction date and the subsequent settlement data is called ______________.

• Economic

• Translation

• Transaction

• Price

• Not aware of

The risk that a government may default on its debt obligation is ____________ .

• Political risk

• Sovereign risk

• Transfer risk

• Transaction risk

• Not aware of

1 GBP = $ 0.739, it is a direct quote for __________.

• UK

• USA

• India

• Germany

• Not aware of

_____________ is a technique in which exposure is managed by shifting the time of exposure by accelerating or delaying the receivables or payables.

• Matching

• Leading and lagging

• Invoicing in domestic currency

• Forward contracts

• Not aware of

__________ quote is also known as reference rate

• Bid

• Ask

• Spread

• Mid

• Not aware of

For quote GBP/SEK 6.4750-6.4850; % spread is ____________

• 0.01%

• 0.1534%

• 0.1544%

• 0.1454%

• Not aware of