题目内容

An import-export business that finds itself in a “short” foreign-currency position risks a financial loss if:

A. it pays attention to exchange rate forecasts.
B. foreign demand for its product rises (more than expected).
C. the domestic currency depreciates (more than expected).
D. the foreign currency depreciates (more than expected).

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Which of the following financial instruments provides a buyer the right (but not the obligation) to purchase or sell a fixed amount of currency at a prearranged price, within a few days to a few years?

A. Letter of credit
B. Currency option
Currency swap
D. Forward contract

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An investment exposed to exchange-rate risk is a(n) _____ international investment.

A. hedged
B. covered
C. uncovered
D. arbitrage

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An investment is _____ if it is fully hedged against exchange-rate risk.

A. risk neutral
B. covered
C. uncovered
D. speculative

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Concerning the covering of exchange rate risks, assuming that a depreciation of the domestic currency is feared, one can say that there is an incentive for:

A. exporters to rush to cover their future needs.
B. importers to rush to cover their future needs.
C. both exporters and importers to rush to cover their future needs.
D. monetary authorities to rush to cover their future needs.

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An import-export business that finds itself in a “short” foreign-currency position risks a financial loss if:

A. it pays attention to exchange rate forecasts. B. foreign demand for its product rises (more than expected). C. the domestic currency depreciates (more than expected). D. the foreign currency depreciates (more than expected).

Which of the following financial instruments provides a buyer the right (but not the obligation) to purchase or sell a fixed amount of currency at a prearranged price, within a few days to a few years?

An investment exposed to exchange-rate risk is a(n) _____ international investment.

An investment is _____ if it is fully hedged against exchange-rate risk.

Concerning the covering of exchange rate risks, assuming that a depreciation of the domestic currency is feared, one can say that there is an incentive for:

A. it pays attention to exchange rate forecasts.
B. foreign demand for its product rises (more than expected).
C. the domestic currency depreciates (more than expected).
D. the foreign currency depreciates (more than expected).