WorksheetsCurrency and International Business Quiz
Total questions: 10
Worksheet time: 8mins
What is the definition of exchange rates?
The value of one currency in relation to another currency.
The rate at which interest is charged on loans and credit cards.
The rate at which stocks and bonds are traded on the stock market.
The rate at which goods and services are exchanged between countries.
What are currency fluctuations? Changes in the value of one currency relative to ___
changes in the price of gold
another currency caused by government regulations.
another currency over a period of time.
another currency due to inflation.
What are foreign exchange markets?
Markets for buying and selling commodities
Centralized markets for buying and selling currencies
Markets for buying and selling stocks
Decentralized markets for buying and selling currencies
What is currency risk management?
Strategies to increase the impact of exchange rate fluctuations on financial transactions or investments.
Techniques to completely eliminate the impact of exchange rate fluctuations on financial transactions or investments.
Methods to maximize profits from exchange rate fluctuations.
Strategies and techniques to mitigate the impact of exchange rate fluctuations on financial transactions or investments.
How does currency devaluation impact international business?
It has no impact on international business
It leads to a decrease in demand for both domestic and foreign products
It makes exports more expensive and imports cheaper
It can make exports cheaper and imports more expensive, leading to changes in demand for domestic and foreign products.
Which of the following is NOT a factor affecting exchange rates?
The color of the sky
Political stability
Inflation
Interest rates
What is the main purpose of foreign exchange markets?
To sell foreign goods
Facilitate the exchange of one currency for another
To regulate the stock market
To provide loans to foreign countries
How can an international company protect itself against currency changes?
Hedging (the use of futures, options, and/or currency-hedged funds
Diversification globally and investing in countries with conservative currency management
Transacting in your own currency, e.g. demand payment in US$
All of the above
What is positive about your currency suddenly weakening?
Your exports become cheaper
Demand for your commodities may rise
It may help government correct balance of payment
imbalances
All of the above
What are the potential negative/s of currency devaluation for businesses?
Weakening purchasing power
All of the above
Less profits (if you are owned by an overseas company)
Rising cost of imported materials
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