IF

Foreign exchange risk includes:

• Translation exposure

• Transaction exposure

• Economic exposure

• All of above

You'll speed payments of currencies expected to appreciate

• True

• False

The difference between the forward exchange rate and the expected future spot exchange rate is known as:

• A risk premium

• A risk surplus

• A risk facevalue

• A risk rate

If the percentage change in the exchante rate is equal to the inflation rate differential between countries, then relative PPP holds

• False

• True

A currency is overvalued if it has:

• appreciated less than the inflation rate differental between two countries

• appreciated more than the inflation rate differential between two countries

• depreciated less than the inflation rate differental between two countries

• depreciated more than the inflation rate differental between two countries

The forward exchange market is composed mainly by:

• Stock exchanges

• Commercial banks

• Brokers

• Regulators

A country balance of payments records only payments and receipts that don't cross country's borders

• False

• True

In the short-term, economic factors (for example, demand/supply of foreign and domestic goods) affect the exchange rate movement.

• True

• False

A forward looking instrument allows reduce the exposure to exchange rate volatility

• False

• True

An off-shoring process could be result in a exchange risk hedging strategy

• False

• True