Chapter 9

Chapter 9
Student: ___________________________________________________________________________

1.

A stronger Korean won, remembering that Kia cars sold in the United States are paid for in dollars, means what for Kia?
A. a need to hedge Japanese yen
B. a use for the Euro, a neutral currency
C. less profit
D. a use for gold to protect against currency fluctuations
E. more profit

2.

The _____________ is a market for converting the currency of one country into that of another.
A. foreign exchange market
B. cross-cultural interchange
C. financial barter market
D. monetary replacement market
E. international currency spot market

3.

The rate at which one currency is converted into another is called the ___________.
A. replacement percentage
B. resale rate
C. exchange rate
D. interchange ratio
E. valuation rate

4.

Without the ____________ market, international trade and international investment on the scale that we see today would be impossible.
A. foreign exchange
B. financial barter
C. foreign resale
D. monetary replacement
E. capital market

5.

Although the _____________ offers some insurance against foreign exchange risk, it cannot provide complete insurance.
A. foreign exchange market
B. the Euro
C. World Bank
D. foreign currency exchange
E. the CDC

6.

The ______________ is the market that enables companies based in countries that use different currencies to trade with each other.
A. World Bank
B. foreign currency exchange
C. foreign exchange market
D. foreign monetary mart
E. foreign exchange mechanism

7.

The movement of foreign exchange rates
A. provide some insurance against foreign exchange risk.
B. has significantly deteriorated the overall volume of foreign trade.
C. sets interest rates charged to foreign investors.
D. introduces many risks into international trade and investment.
E. is a natural function of supply and demand among currency traders

8.

When a tourist exchanges one currency into another, she is participating in the:
A. foreign