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True or False
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1
A market for converting the currency of one country into that of another is referred to as foreign exchange market.
A)True
B)False
2
A global network of banks, brokers, and foreign exchange dealers connected by electronic communications is referred to as the foreign exchange market.
A)True
B)False
3
The foreign exchange (4X) market serves two main functions, one of which is to provide some insurance against 4X risk.
A)True
B)False
4
With the globalization trends, tourists, not the companies engaged in international trade and investment, are the major participants in the foreign exchange market.
A)True
B)False
5
A short-term movement of funds from one currency to another in the hopes of profiting, is called currency speculation.
A)True
B)False
6
The Canadian dollar is immune to speculation.
A)True
B)False
7
Small Canadian businesses can be highly susceptible to exchange rate fluctuations when exporting to the United States
A)True
B)False
8
The spot exchange rate is the rate at which a 4X dealer converts one currency into another currency "on a particular day"
A)True
B)False
9
The forward exchange rate is the rate at which a 4X dealer converts one currency into another currency "on a particular day"
A)True
B)False
10
A currency swap is the simultaneous purchase and sale of a given amount of foreign exchange for a single date.
A)True
B)False
11
Arbitrage is buying a currency low and selling it high
A)True
B)False
12
A government increasing the money supply is analogous to giving people more money
A)True
B)False
13
An inefficient market is one in which prices do not reflect all available information
A)True
B)False
14
Capital flight is most likely to occur when the value of the domestic currency is appreciating rapidly
A)True
B)False





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