Currency Exchange Rates MCQs

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What is the role of gold in the present international monetary system?






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Freely fluctuating exchange rates perform which of the following functions?






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In foreign currency markets, the phrase managed float refers to the






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An overvalued foreign currency exchange rate






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If the value of the U.S. dollar in foreign currency markets changes from $1 = .75 euros to $1 = .70 euros,






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One may characterize the current international monetary system developed by the industrialized countries as a






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If the U.S. dollar-peso exchange rate is $1 for 9 pesos, a product priced at 45 pesos will cost a U.S. consumer






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If a U.S. firm can buy 20,000 for $100,000, the rate of exchange for the pound is






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Assume the spot rate of the Canadian dollar is $.90. If the spot rate one year from now is $.85, the Canadian dollar will have






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Given a spot rate of $1.8655 and a 90-day forward rate of $1.8723, the pound sterling in the forward market is






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Francine is the CFO for a mid-sized corporation based in the USA. Her corporation needs to pay a German company 0,000 Euros in 30 days for materials F...






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Exchange rates are determined by






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If consumers in Japan decide they would like to increase their purchases of consumer products made in the United States, in foreign currency markets t...






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If the exchange rate has changed from 1 U.S. dollar to 5 foreign currency units (FCUs) to a rate of 1 U.S. dollar to 5.5 FCUs,






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The spot rate for one Australian dollar is US $0.92685 and the 60-day forward rate is US $0.93005. Which one of the following statements is consistent...






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If the dollar price of the euro rises, which of the following will occur?






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What is the effect on prices of U.S. imports and exports when the dollar depreciates?






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What is the effect when a foreign competitors currency becomes weaker compared to the U.S. dollar?






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The U.S. dollar has a free-floating exchange rate. When the dollar has fallen considerably in relation to other currencies, the






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If the U.S. dollar declines in value relative to the currencies of many of the U.S. trading partners, the likely result is that






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Debt-servicing problems of less developed countries that primarily sell raw materials to the United States would be eased by






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Of the following transactions, the one that would result in worsening the U.S. balance of payments account is the






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In most recent years, the U.S. balance of payments has registered a deficit. This balance of payments deficit is a measure of the excess of






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The U.S. balance of trade is decreased by






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An appreciation of the U.S. dollar against the Japanese yen would






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A U.S. company took out a 12-month, 4% loan of 10,000 when the spot rate was $2 to 1. At the end of the loan term, the spot rate was 2. 0 to . Wha...






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On September 22, Year 1, Yumi Corp. purchased merchandise from an unaffiliated foreign company for 0,000 units of the foreign companys local currency...






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A gold-mining company expects to sell 10,000 ounces of gold 6 months from today. The revenue risk of selling the gold can be hedged by






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Suppose that Swiss wrist watches priced in Swiss francs become very popular among U.S. consumers while Britain experiences relatively higher inflation...






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Assuming exchange rates are allowed to fluctuate freely, which one of the following factors would likely cause a nations currency to appreciate on th...






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Two countries have flexible exchange rate systems and an active trading relationship. If incomes in Country 1, everything else being equal, then the ...






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Which of the following changes would create pressure for the Japanese yen to appreciate relative to the U.S. dollar?






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A company manufactures goods in Esland for sale to consumers in Woostland. Currently, the economy of Esland is booming and imports are rising rapidly....






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If the central bank of a country raises interest rates sharply, the countrys currency will likely






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Over the past year, incomes in Russia have risen across the board. Todays spot rate with respect to the U.S. dollar is $1 = 30 rubles. Which one of t...






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A fall in the demand for a countrys currency can be caused by any of the following except:






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A shift of the demand curve for a countrys currency to the right could be caused by which of the following?






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All of the following are trade-related factors affecting currency exchange rates except






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The spot rate for the U.S. dollar is 0.6543, and the 60-day forward rate is 0.6521. The pound is selling at






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The purchasing-power parity exchange rate






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The interest-rate parity theorem states that






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The three generally acknowledged theories regarding currency exchange rates suggest all of the following about high-inflation currencies except:






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If the annual U.S. inflation rate is expected to be 5% while the euro is expected to depreciate against the U.S. dollar by 10%, an Italian firm import...






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Which one of the following statements supports the conclusion that the U.S. dollar has gained purchasing power against the Japanese yen?






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If the annual U.S. inflation rate is expected to be 3%, and the Ptomanian ptoma is expected to depreciate against the U.S. dollar by 12%, a Ptomanian ...






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Consider a world consisting of only two countries, Canada and Ruritania. Inflation in Canada in 1 year was 5%, and in Ruritania 10%. Which one of the ...






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Caroline Brown, the product manager for a U.S. computer manufacturer, is being asked to quote prices of desktop computers to be used in Kuwait. The Ku...






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An American importer of English clothing has contracted to pay an amount fixed in British pounds 3 months from now. If the importer worries that the U...






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If risk is purposely undertaken in the foreign currency market, the investor in foreign currency then becomes






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A company has a foreign-currency-denominated trade payable, due in 60 days. In order to eliminate the foreign currency exchange-rate risk associated w...






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When the U.S. dollar is expected to rise in value against foreign currencies, a U.S. company with foreign currency denominated receivables and payable...






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A short-term speculative rise in the world-wide value of domestic currency could be moderated by a central bank decision to






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Bonner Electronics has subsidiaries in several international locations and is concerned about its exposure to foreign exchange risk. In countries wher...






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A U.S. company has an account payable it must pay in 6 months with one Japanese company and an account receivable to be received in 6 months with anot...






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A firm in Australia imports chairs from Bangladesh and resells them in Australia for A$45 per unit. The firm placed an order for 1,000 chairs with the...






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Suppose that the current exchange rate between the Japanese yen () and the U.S. dollar ($) is 100 = $1. A financial analyst predicts that the exchan...






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Which of the following should be reported as a stockholders equity account?






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A foreign subsidiarys functional currency is its local currency, which has not experienced significant inflation. The weighted-average exchange rat...






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The functional currency of Nash, Inc.s subsidiary is the euro. Nash borrowed euros as a partial hedge of its investment in the subsidiary. In prepa...






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A balance arising from the translation or remeasurement of a subsidiarys foreign currency financial statements is reported in the consolidated inco...






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When remeasuring foreign currency financial statements into the functional currency, which of the following items would be remeasured using historic...






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Park Co.s wholly owned subsidiary, Schnell Corp., maintains its accounting records in euros. Because all of Schnells branch offices are in Switzer...






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In preparing consolidated financial statements of a US parent company with a foreign subsidiary, the foreign subsidiarys functional currency is the...






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For IFRS reporting purposes, currencies are defined as






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For IFRS reporting, the functional currency is






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For IFRS reporting, if the functional currency is the same as the presentation currency, any translation gains or losses are generally reported as






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Which of the following is not a IFRS requirement regarding foreign currency translation?