BUSI 604 Test 2 (Set-1), Questions And Answers, Liberty University

BUSI 604 Test 2 false



Question 1
2 out of 2 points
The most important issue in understanding the effects of exchange
rates on business is its (________).

Selected Answer: Volatility



Question 2
2 out of 2 points
Many nations restrict hedging of their currencies due to their national
and international policies and interests.

Selected Answer: False


Question 3
2 out of 2 points
Since the world thrives to trade and does not have a uniformed
international currency, the exchange rate from one currency to
another is determined by (______) and (________) on a given day on
the FX Market.

Selected Answer: supply and demand



Question 4

,2 out of 2 points
A simpler way to calculate purchasing power parity between two
countries is to compare the price of a (________) good that is in fact
identical across countries.

Selected Answer: Standard



Question 5
2 out of 2 points
Purchasing Power Parity has an impact on exchange rates and
indicates the current level of inflation of one currency against
another.

Selected Answer: True
Question 6
2 out of 2 points
(________) and (_________) quotation are also referred to as
American and European Quotes.

Selected Answer: direct and indirect

Question 7
2 out of 2 points
The public begins to experience the effects of deflation with an
expanding money supply.

Selected Answer: False
Question 8

, 2 out of 2 points
Consumers attempt to offset inflation by exchanging (_________) for
something that is perceived to hold a value better such as property,
gold, or foreign currencies.

Selected Answer: lower-value currency

Question 9
0 out of 2 points
The economies of the world have become highly interdependent
because of improvements in communication and transportation
technologies and the lowering of barriers to trade.

Selected Answer: False
Question 10
0 out of 2 points
Forward rates are typically cheaper than spot rates.

Selected Answer: False
Question 11
2 out of 2 points
(_________) are used as an alternative to borrowing and lending in
the Eurodollar and other offshore markets.

Selected Answer: FX swaps

Question 12
2 out of 2 points