QUIZ MGT 361

What most likely happens when the price of yen falls?

• the quantity of yen demanded goes down

• the demand curve slopes downward

• the demand curve slopes upward

• the value of yen fluctuates

Which of the following is not an example of a participant in the foreign exchange market?

• Pakistani tourists exchanging rupees for British pounds at a bank in London

• British retailer Marks and Spenser purchasing appliances from a British supplier

• the U.S. government arranging a multimillion-dollar loan to Mexico

• Toyota exporting cars to Canada from factories in Japan

________ is a commodity that consists of currencies issued by countries other than one's own.

• Eurozone

• Foreign exchange

• Floating exchange

• International monetary fund

The price of foreign exchange is set by ________.

• the international monetary fund

• the gold standard

• demand and supply in the marketplace

• administrators of the World Bank

Tyler, a U.S. citizen, received a quote on the dollar/yen relationship of ¥108.21/$1. Tyler most likely received a(n) ________ quote.

• indirect

• direct

• yen

• dollar

Carol, an American banker, received a quote between the U.S. dollar and the Japanese yen of $.00924/¥1. Carol most likely received a(n) ________ quote.

• indirect

• direct

• dollar

• yen

________ assume exchange rate risks by acquiring positions in a currency and hoping that they can correctly predict changes in the currency's market value.

• Commercial customers

• Speculators

• Arbitrageurs

• Individuals

________ attempt to exploit small differences in the price of a currency between markets by buying currencies in lower-priced markets and selling in higher-priced markets.

• Commercial customers

• Speculators

• Arbitrageurs

• Individuals

A spot transaction ________.

• is a foreign exchange transaction that is consummated immediately

• is a foreign exchange transaction that occurs sometime in the future

• involves currencies that are not freely tradeable

• involves a transaction in which the same currency is bought and sold simultaneously

A forward transaction ________.

• is a foreign exchange transaction that is consummated immediately

• is a foreign exchange transaction that occurs sometime in the future

• involves currencies that are not freely tradeable

• involves a transaction in which the same currency is bought and sold simultaneously