IB Chapter 9, 10

The ____________ is a market for converting the currency of one country into that of another.

• foreign exchange market

• cross-cultural interchange

• financial barter market

• international currency spot market

The rate at which one currency is converted into another is called the ___________.

• replacement percentage

• exchange rate

• interchange ratio

• valuation rate

Canadian businesses will normally use the ________________ in international transactions.

• British pound

• Euro

• U.S. dollar

• Japanese yen

When two parties agree to exchange currency and execute the deal immediately, the transaction is referred to as a ______________.

• point-in-time exchange

• forward exchange

• transaction

• spot exchange

A ______________ exchange occurs when two parties agree to exchange currency and execute the deal at some specific date in the future.

• reverse

• spot

• forward

• futures

A(n) _______ is a system under which the exchange rate for converting one currency into another is continuously adjusted depending on the laws of supply and demand.

• pegged exchange rate

• floating exchange rate

• international monetary system

• fixed exchange rate

Transaction exposure is the extent to which the income from individual transactions is affected by fluctuations in

• Countertrade

• Foreign Exchange Values

• Selling Short

• Barter

Economic exposure is the extent to which a firm’s future international earning power is affected by ______________

• exchange rates

• selling short

• countertrade

• arbitrage

Under a _______, the value of most currencies in terms of U.S. dollar was fixed for long periods.

• floating rate system

• dirty-float system

• fixed exchange rate system

• managed exchange rate system

A criticism of the IMF is:

• its one-size-fits all approach.

• its relaxed monetary discipline.

• its lack of control over government.

• its lack of focus on promoting development.