Busi 303 Final Exam- Terms Questions
and All Correct Answers 2025-2026
Updated.
international monetary fund (IMF) - Answer maintain order in the global monetary system
Future Positions - Answer require a margin deposit to be posted and maintained daily
Speculation - Answer Traders take risks as they buy/sell currencies based on predicted rise/fall
in the price of the given currency
FX swap - Answer Simultaneous purchase and the sale of a currency for different delivery
dates
Currency Board - Answer Monetary authority for a country/operates like a central bank
Forward Exchange - Answer Rate at which currency can be purchased in the future
Direct Quotation - Answer American: value of foreign currency in domestic currency
Indirect Quotation - Answer European: value of domestic currency in foreign currency
Variable interest rate loan - Answer Where the borrower and lender share the interest rate
risks
Forward Discount - Answer The difference between a spot rate and a forward rate
Convertible currencies - Answer Currencies that can easily be exchanged for other currencies
Revaluation - Answer upward change in the currency's value
Law of one price - Answer similar goods in different countries should remain at the same price
, Spot rates - Answer exchange rate of one currency in units to another currency immediately
Arbitrage - Answer Buying a commodity when its price is low and then reselling it after prices
rise in order to make a profit.
Fixed exchange rates - Answer Government/central bank ties the official exchange rate to
another country's currency or price of gold
foreign exchange market - Answer currency of one country is exchanged for currency in
another country
OTC market - Answer Decentralized market of securities not listed on an exchange market
Hedging - Answer Measures taken to protect from loss that may occur due to exchange rate of
currency fluctuation
Preferential trade areas - Answer country reduce/remove tariff/non-tariff barriers to trade
between other members; decide own barriers for non-members
ACP - Answer Africa, Pacific, Caribbean Pact; Lome Convention
Mercosur - Answer A preferential Trade Area that includes Africa, the Pacific, and the
Caribbean
Trading bloc - Answer Most advanced form of regional economic integration
NAFTA - Answer Was signed by the presidents of Mexico, U.S., and Canada in 1992
Free trade area - Answer U.S.- chile agreement of 2003
ASEAN - Answer A regional agreement that includes countries of Brunei Darussalam,
Cambodia, Laos, Philippines, and Thailand
and All Correct Answers 2025-2026
Updated.
international monetary fund (IMF) - Answer maintain order in the global monetary system
Future Positions - Answer require a margin deposit to be posted and maintained daily
Speculation - Answer Traders take risks as they buy/sell currencies based on predicted rise/fall
in the price of the given currency
FX swap - Answer Simultaneous purchase and the sale of a currency for different delivery
dates
Currency Board - Answer Monetary authority for a country/operates like a central bank
Forward Exchange - Answer Rate at which currency can be purchased in the future
Direct Quotation - Answer American: value of foreign currency in domestic currency
Indirect Quotation - Answer European: value of domestic currency in foreign currency
Variable interest rate loan - Answer Where the borrower and lender share the interest rate
risks
Forward Discount - Answer The difference between a spot rate and a forward rate
Convertible currencies - Answer Currencies that can easily be exchanged for other currencies
Revaluation - Answer upward change in the currency's value
Law of one price - Answer similar goods in different countries should remain at the same price
, Spot rates - Answer exchange rate of one currency in units to another currency immediately
Arbitrage - Answer Buying a commodity when its price is low and then reselling it after prices
rise in order to make a profit.
Fixed exchange rates - Answer Government/central bank ties the official exchange rate to
another country's currency or price of gold
foreign exchange market - Answer currency of one country is exchanged for currency in
another country
OTC market - Answer Decentralized market of securities not listed on an exchange market
Hedging - Answer Measures taken to protect from loss that may occur due to exchange rate of
currency fluctuation
Preferential trade areas - Answer country reduce/remove tariff/non-tariff barriers to trade
between other members; decide own barriers for non-members
ACP - Answer Africa, Pacific, Caribbean Pact; Lome Convention
Mercosur - Answer A preferential Trade Area that includes Africa, the Pacific, and the
Caribbean
Trading bloc - Answer Most advanced form of regional economic integration
NAFTA - Answer Was signed by the presidents of Mexico, U.S., and Canada in 1992
Free trade area - Answer U.S.- chile agreement of 2003
ASEAN - Answer A regional agreement that includes countries of Brunei Darussalam,
Cambodia, Laos, Philippines, and Thailand
