MANA 1301 Chapter 4
An investor requires the added return for risk associated with a security or asset. What
would this added return be called? - answer Risk Premium
What information would the balance of payments (BOP) provide to a manager of an
international firm? - answer The demand for a country's currency and potential changes
in its economic environment
How would a purchase of foreign goods from the United States that required importing
be recorded in the balance of payment (BOP)? - answer As a debit in the current
account
What are the activities of consumers and businesses in the economy with respect to the
trade balance, services balance, income balance, and net transfers collectively referred
to as? - answer Current Account
Imagine you were evaluating a system that sets the values of major currencies based
on their demand and supply in world currency markets. What type of system is this? -
answer Independent Floating Exchange System
Which country uses a managed floating exchange rate system? - answer Indonesia
ABC Limited, a U.S.-based company, has a liability to deliver 2 million euros in nine
months. To minimize the risk of significant currency fluctuations, it decides to enter into
a contract to purchase 2 million euros on the same date to ensure it can buy and sell in
the same currency on the same date. What is this an example of? - answerA hedge
Country A is an emerging economy and Country B is a developed economy with a hard
currency. Country A's currency is less stable in value than Country B's currency and is
pegged to Country B's currency value. How would you describe Country A's currency? -
answerSoft
For many countries, adopting the euro has provided many benefits EXCEPT which of
the following? - answerA reduction in GDP
Which country practices dollarization? - answerEl Salvador
If you were a global distributor and purchased products in a lower priced market and
then sold those products in a higher priced market, what would this practice be called? -
answerArbitrage
An investor requires the added return for risk associated with a security or asset. What
would this added return be called? - answer Risk Premium
What information would the balance of payments (BOP) provide to a manager of an
international firm? - answer The demand for a country's currency and potential changes
in its economic environment
How would a purchase of foreign goods from the United States that required importing
be recorded in the balance of payment (BOP)? - answer As a debit in the current
account
What are the activities of consumers and businesses in the economy with respect to the
trade balance, services balance, income balance, and net transfers collectively referred
to as? - answer Current Account
Imagine you were evaluating a system that sets the values of major currencies based
on their demand and supply in world currency markets. What type of system is this? -
answer Independent Floating Exchange System
Which country uses a managed floating exchange rate system? - answer Indonesia
ABC Limited, a U.S.-based company, has a liability to deliver 2 million euros in nine
months. To minimize the risk of significant currency fluctuations, it decides to enter into
a contract to purchase 2 million euros on the same date to ensure it can buy and sell in
the same currency on the same date. What is this an example of? - answerA hedge
Country A is an emerging economy and Country B is a developed economy with a hard
currency. Country A's currency is less stable in value than Country B's currency and is
pegged to Country B's currency value. How would you describe Country A's currency? -
answerSoft
For many countries, adopting the euro has provided many benefits EXCEPT which of
the following? - answerA reduction in GDP
Which country practices dollarization? - answerEl Salvador
If you were a global distributor and purchased products in a lower priced market and
then sold those products in a higher priced market, what would this practice be called? -
answerArbitrage
