BUSI 303 Test 3 And Test 4 (13-14)
Questions And 100% Correct Answers
2025-2026 Edition.
Cross Rates - Answer Have to be calculated when parties are conducting a trade in currency
other than USD.
Direct Quotation - Answer Value of foreign currency in domestic country.
Devaluation - Answer Deliberate downward adjustment in the official exchange rate.
FX Swap - Answer Simultaneous purchase and sale of a currency for different delivery dates.
World Bank - Answer Helps finance economic development in poor countries.
Foreign Exchange Market - Answer Currency of ones country is exchanged for currency of
another country.
Forward Exchange - Answer Rate at which currency can be purchased in the future.
Arbitrage - Answer Buying a commodity when its price is low and then reselling it after prices
rise in order to make a profit.
International Monetary Fund (IMF) - Answer Maintain order in the global monetary system.
Spot Rates - Answer Exchange Rates of one currency of units of another currency immediately
"on the spot" .
Revaluation - Answer Upward change in the currency's value.
Stocks - Answer Represents shares of equity that a company releases for sale.
, Exchange Rate Mechanism - Answer Formed the initial steps for the creation of a single
European currency.
Futures - Answer Represents contracts for future delivery of a commodity.
Indirect Quotation - Answer Value of domestic currency in foreign currency.
Fixed Exchange Rate - Answer When a government/Central Bank ties the official exchange rate
to another country's currency or price of gold.
Hedging - Answer Measures taken by a company to protect from the loss that may occur due
to exchange rate or currency fluctuation.
Currency Board - Answer Monetary authority for a country/operates like a central bank.
OTC Market - Answer Decentralized market of securities not listed on an exchange market.
Licensing Advantages/Disadvantages - Answer Advantages: Low to no cost, moderate
involvement and commitment
Disadvantages: Loss of control, no location or experience curve economies, inability to engage
in global strategic coordination
Six modes for serving foreign markets - Answer 1) Exporting
2) licensing
3) franchising to host-country firms
4) establishing joint ventures with a host-country firm
5) wholly owned subsidiary in host country'
6) acquiring an established enterprise in host country
Foreign expansion questions - Answer 1 - which markets to enter
2 - when to enter
3 - at what scale
Questions And 100% Correct Answers
2025-2026 Edition.
Cross Rates - Answer Have to be calculated when parties are conducting a trade in currency
other than USD.
Direct Quotation - Answer Value of foreign currency in domestic country.
Devaluation - Answer Deliberate downward adjustment in the official exchange rate.
FX Swap - Answer Simultaneous purchase and sale of a currency for different delivery dates.
World Bank - Answer Helps finance economic development in poor countries.
Foreign Exchange Market - Answer Currency of ones country is exchanged for currency of
another country.
Forward Exchange - Answer Rate at which currency can be purchased in the future.
Arbitrage - Answer Buying a commodity when its price is low and then reselling it after prices
rise in order to make a profit.
International Monetary Fund (IMF) - Answer Maintain order in the global monetary system.
Spot Rates - Answer Exchange Rates of one currency of units of another currency immediately
"on the spot" .
Revaluation - Answer Upward change in the currency's value.
Stocks - Answer Represents shares of equity that a company releases for sale.
, Exchange Rate Mechanism - Answer Formed the initial steps for the creation of a single
European currency.
Futures - Answer Represents contracts for future delivery of a commodity.
Indirect Quotation - Answer Value of domestic currency in foreign currency.
Fixed Exchange Rate - Answer When a government/Central Bank ties the official exchange rate
to another country's currency or price of gold.
Hedging - Answer Measures taken by a company to protect from the loss that may occur due
to exchange rate or currency fluctuation.
Currency Board - Answer Monetary authority for a country/operates like a central bank.
OTC Market - Answer Decentralized market of securities not listed on an exchange market.
Licensing Advantages/Disadvantages - Answer Advantages: Low to no cost, moderate
involvement and commitment
Disadvantages: Loss of control, no location or experience curve economies, inability to engage
in global strategic coordination
Six modes for serving foreign markets - Answer 1) Exporting
2) licensing
3) franchising to host-country firms
4) establishing joint ventures with a host-country firm
5) wholly owned subsidiary in host country'
6) acquiring an established enterprise in host country
Foreign expansion questions - Answer 1 - which markets to enter
2 - when to enter
3 - at what scale
