UNIT 2 The Field of Accounting 1.

The state of a nations trade balance of payments help determine the rate of exchange for its currency. 2. The comparative value of each nations money was determined by the ratio of the gold content of each coin. 3. When a nations trade balance of payments is in deficit. 4. Spot rate Future rate : which means that stetlement occurs in two bussiness day : for setlement on delivey at any future date

This transaction result in a future or forward contract. 5. Headger : the purchase or sale of foreign exchange in the future in order to

avold a loss due to any change in the rate of exchange during that period. Speculator or vice versa 6. Of a New York 7. The broker briness both sides of the transaction quickly together by telephoning in the buyer and seller and arriving at a mutually a accept table rate 8. Yes, can without a broker If a buyer and seller agree on the price of exchanging two currencies but, more can vienent to use a broker. 9. 10. Because, every country does not have all resource if need but the other might have because of that trade between country happened. To full fill the need of every country and the most factor that is use in the trade is currency or money. :buy or salles foreign exchange without of setting the purchase contract

11. The major international banks (trading primarilly for the accounts of their customer) brokurs, control bank, and large corporation with international activities ( trading usually to project their currency from short- term fluctuations) and individuals (trading as speculators and investor) 12. Because, demand and supply is not always staquan, there is a lot of factor that change demand. Example : is politic or disaster 13. Because, over to much exchange can cause a error balance of economy in a country especiallyforeign trade. A to much investation from outside or another country can show down a quowth of corporate or bussibess from inside country. A much woise ia a possibilty of take over if economy in a country by other country. 14. So he can avoid a loss due to any change in the rate of exchange during that the period. 15. Yes, it does by a when the cros rute are favorable. 16. To make a profits cause the cross over favorable. 17. To make a profits cause the cross rates are favorable. 18. Because, some corporation have a find surplus fund. Then last the funds storange. It is will money use full if it is invested the corporation my find that it can cause a higher rate of return by investing in foreign currency. If after deducting the hedger cost and any out of pocket expenses such cable cost. He funds that the rate of return is still hedger the currency of it is a was country. The many them makes the short term investment in others country. 19. Based on supply and demand of specific currency of every country. 20. American or will street based from counts of supply and demand of every country.