Introduction To Finance Markets Investments and Financial Management 15Th Edition Melicher Test Bank Full Chapter PDF

Introduction to Finance Markets
Investments and Financial Management

15th Edition Melicher Test Bank
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Chapter 6
International Finance and Trade
TRUE-FALSE QUESTIONS
1. The United Nations operates a world central bank that provides a world monetary
unit to accommodate commerce across national boundaries.
Answer: F
Difficulty Level: Medium
Subject Heading: International Institutions
2. If someone needs to make a payment in the currency of another country, they must Formatted: Indent: Left: 0", First line: 0"
have actual possession of that currency. Commented [EN1]: Tricky. Especially in the day of electronic
Answer: F funds transfer, credit cards, etc.
Difficulty Level: Medium Formatted: Indent: Left: 0", Right: 0", Tab stops: 0.5",
Subject Heading: Foreign Exchange Right + 0.56", Left + Not at 0.79"
23. Foreign exchange markets are electronic communication systems connecting the
major financial centers of the world.
Answer: T
Difficulty Level: Easy
Subject Heading: Foreign Exchange
34A. The direct quotation method expresses the number of foreign currency units
needed to buy one U.S. dollar.
Answer: F
4B27. The direct quotation method indicates the amount of a foreign currency necessary Formatted: Strikethrough
to purchase one unit of the home country’s currency.
Answer: F
Formatted: Indent: Left: 0", First line: 0"

5. A nation with a relatively lower inflation rate than other countries will have a relatively
stronger currency holding other factors constant.
Answer: T
6. A nation with relatively lower interest rate levels than other countries will have a
relatively stronger currency.
Answer: F
7. Arbitrage is the simultaneous buying of securities in one market and selling them in
another to make a profit from price differences in the two markets.
Answer: T
8. The banker’s sight draft provides an exchange rate that is lower than either the
banker’s time draft or cable rate. Commented [EN2]: Not in chapter
Answer: F Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
Difficulty Level: Medium Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
Subject Heading: International Trade Finance
89. The order bill of lading represents the written acceptance of goods for shipment by
a transportation company and the terms under which the goods are to be
transported to their destination.
Answer: T
910. A sight draft is one that is not accompanied by any special documents and is
generally used when the exporter has confidence in the importer’s ability to meet
the draft when presented.
Answer: F
101. The bankers’ acceptance is a draft drawn on and accepted by a bank rather than
the importing firm.
Answer: T
112. A trust receipt is an instrument through which a bank retains title to goods until they
are paid for.
Answer: T
13. The bankers’ acceptance and the documentary draft involve four principal parties:
the importer, the importer’s bank, the exporter, and the exporter’s bank.
Answer: F
124. The Board of Governors of the Federal Reserve System authorizes member banks
to accept drafts that arise in the course of certain types of international
transactions.
Answer: T
135. The Export-Import Bank is a corporation owned by the Federal Reserve Banks.
Answer: F
146A. The traveler’s letter of credit is issued by a bank to banks in other countries
authorizing foreign banks to cash checks or purchase drafts presented by the
bearer.
Answer: T
156B32. A traveler’s letter of credit is issued by a bank in one country and Formatted: Not Strikethrough
addressed to a list of foreign banks which are usually correspondents of the issuing Formatted: Strikethrough
bank and have agreed to purchase sight drafts presented to them by persons with
appropriate letters of credit.
Answer: T
167. The balance of payments is a summary of all economic transactions between one
country and the rest of the world.
Answer: T
Subject Heading: Balance of Payments
178. Slow economic growth in investments in another country would be an example of

political risk.
Answer: F
Subject Heading: International Business Risk
18. The capital account balance includes all foreign private and government Formatted: Font: (Default) Arial
investment in the United States netted against U.S. investments in foreign Formatted: Font: (Default) Arial, Not Bold, Not Italic
countries. Formatted: Font: (Default) Arial
Answer: T
Formatted: Indent: Left: 0", Hanging: 0.56"
Difficulty: Easy
Subject: Balance of Payments

199. The current account balance shows the flow of income into and out of the United
States during a specified time period.
Answer: T
20. Special Drawing Rights are international reserve assets created by the Formatted: Indent: Left: 0", First line: 0"
International Monetary Fund that can be drawn upon by member nations.
Answer: T Formatted: Indent: Left: 0"
Subject Heading: International Finance
Formatted: Indent: Left: 0.51", First line: 0", Right: 0.5",
21. Intervention by central banks in the flexible exchange rate system is called a dirty Tab stops: 0.79", Left + Not at 0.5" + 0.56"
float. Commented [EN3]: Not in chapter
Answer: T
2022. Interest rate parity states that a country with a relatively higher expected inflation
rate will have its currency depreciate relative to a country with a relatively lower
inflation rate.
Answer: F
Subject Heading: Interest Rate Parity
213. The ultimate effect of large-scale arbitrage activities on exchange rates is the
elimination of the variation between the two markets.
Answer: T
224. An expected decline in a country’s currency may lead to an attempt to accelerate

collection of accounts receivable from that country for transfer with funds
transferred quickly to another country with a more stable currency.
Answer: T
235. An instrument requiring immediate payment is classified as a time draft.

Answer: F
246. The 1992 1991 Maastricht Treaty formally committed the countries of the European Commented [EN4]: Book says 1991.
Union to economic and monetary union.
Answer: T
Subject Heading: International Trade Agreements
25. International financial markets strongly influence domestic interest rates. Formatted: Indent: Left: 0"
Answer: T Formatted: Font: (Default) Arial
Difficulty: Medium
27. The direct quotation method indicates the amount of a foreign currency necessary Formatted: Indent: Left: 0", First line: 0"
to purchase one unit of the home country’s currency.
Answer: F Formatted: Indent: Left: 0", Right: 0", Tab stops: 0.5",
Difficulty Level: Medium Right + 0.56", Left + Not at 0.79"
268. A contract for the purchase or sale of a currency where delivery will take place at a
future date is called a forward exchange rate.
Answer: T
279A. Under a floating exchange rate system, the value of one currency relative to
another is determined by the forces of supply and demand.
Answer: T
28. In foreign exchange, variations in quotations among countries at any time Formatted: Font: (Default) Arial
are quickly brought into alignment through arbitrage activities. Formatted: Font: (Default) Arial
Formatted: Indent: Left: 0", Hanging: 0.56"
Answer: T
Difficulty: Easy
299B33. Under the system of flexible exchange rates, that began in 1943, exchange Commented [EN5]: This was marked as “False” in the test bank
rates are determined by the actual process of supply and demand in the foreign due to an incorrect date. Don’t think that is fair to the student who
knows the concept of flexiable exchange rates
exchange market.
Formatted: Strikethrough
Answer: T F
Difficulty Level: Medium Formatted: Strikethrough
Subject Heading: Foreign Exchange Formatted: Strikethrough
39. A flexible exchange rate system in which currency exchange rates are determined Tab stops: 0.79", Left + Not at 0.5" + 0.56"
by supply and demand has been in place since 1973. Formatted: Strikethrough
Answer: T Formatted: Indent: Left: 0", First line: 0"
Commented [EN6]: Too similar to above.
Formatted: Indent: Left: 0"
3030. Economic Risk is the risk associated with the possibility that a national government Formatted: Indent: Left: 0", First line: 0"
might confiscate or expropriate assets held by foreigners.
Answer: F
3131. A clean draft is accompanied by an order bill of lading along with other papers such
as insurance receipts, certificates of sanitation, and consular invoices.
Answer: F
32. A traveler’s letter of credit is issued by a bank in one country and addressed to a
list of foreign banks which are usually correspondents of the issuing bank and have
agreed to purchase sight drafts presented to them by persons with appropriate
letters of credit.
Answer: T
33. Under the system of flexible exchange rates that began in 1943, exchange rates Formatted: Indent: Left: 0", First line: 0"
are determined by the actual process of supply and demand in the foreign exchange
market.
Answer: F Formatted: Indent: Left: 0"
3234. The international monetary system consists of institutions and mechanisms that
foster international trade, manage the flow of financial capital, and determine
currency exchange rates.
Answer: T
335. The international monetary system consists of institutions and mechanisms that
foster oversees the World Bank, sets international trade policy, and determines the
exchange rate regime for all participating countries.
Answer: F
36. Up until the start of the Vietnam War, the international monetary system operated Commented [EN7]: Not in the chapter
mostly under a gold standard in which the currencies of major countries were convertible Formatted: Indent: Left: 0", First line: 0"
into gold at fixed exchange rates.
Answer: F Formatted: Indent: Left: 0", Right: 0", Tab stops: 0.5",
Difficulty Level: Medium Right + 0.56", Left + Not at 0.79"
374. The International Monetary Fund (IMF) was created to promote world trade through
monitoring and maintaining fixed exchange rates and by making loans to countries
with payment problems.
Answer: T
Subject Heading: International Trade Organizations
358. The International Bank for Reconstruction and Development (World Bank) was
created to provide banking services for U.S. firms operating overseas.
Answer: F
39. A flexible exchange rate system in which currency exchange rates are determined
by supply and demand has been in place since 1973.
Answer: T
3640. The European Economic Organization (EEO) is an organization of twelve

European countries that agreed to have a common overall monetary policy and the
euro as their common currency.
Answer: F
3741. An indirect exchange rate quotation is simply the reciprocal of a direct exchange
rate quotation.
Answer: T
38. The exchange value of the U.S. dollar relative to other currencies does not Formatted: Indent: Left: 0.06", Hanging: 0.5"
impact international trade balances. Formatted: Font: (Default) Arial
Answer: F
Difficulty: Easy
3942. Holding demand constant, an increase in supply for one currency relative to
another will cause its value to appreciate relative to that currency.
Answer: F
4043A. Holding demand constant, an increase in supply for one currency relative to
another will cause its value to depreciate relative to that currency.
Answer: T
4143BNew. An increase in demand for a currency relative to other currencies Formatted: Indent: Left: 0", Hanging: 0.56"
will cause it to appreciate in value.
Answer: T
Difficulty: Medium
42. 43CNew. Holding demand constant, an decrease in supply for one currency
relative to another will cause its value to depreciate relative to that currency.
Answer: F
Difficulty: Medium
43 43DNew. An decrease in demand for a currency relative to other Formatted: Indent: Left: 0", Hanging: 0.44"
currencies will cause it to depreciate in value.
Answer: T
Difficulty: Medium Formatted: Indent: Left: 0.44", Hanging: 0.44"

444. Purchasing power parity (PPP) states that the currency of a country with relatively
higher inflation will depreciate relative to the currency of a country with a relatively
lower inflation rate.
Answer: T
455. Interest rate parity (IRP) states that the currency of a country with relatively higher
interest rate will appreciate relative to the currency of a country with a relatively
lower interest rate.
Answer: F
466A. Political risk is the risk associated with possible actions by a sovereign nation to
interrupt or change the value of cash flows accruing to foreign investors.
Answer: T
476B48. Political risk is the risk associated with possible slow or negative economic Formatted: Strikethrough
growth, as well as with the likelihood of variability.
Answer: F
487. Economic risk is the risk associated with possible slow or negative economic
growth, as well as with the likelihood of variability.
Answer: T
48. Political risk is the risk associated with possible slow or negative economic growth,
as well as with the likelihood of variability.
Answer: F
499. A documentary draft is a draft that is accompanied by an order bill of lading and
other documents.
Answer: T
5050. An order bill of lading is a document given by a transportation company that lists
goods to be transported and terms of the shipping agreement.
Answer: T
MULTIPLE-CHOICE QUESTIONS
1. If the exchange rate in New York for British pounds sterling is quoted at 1 pound =
$1.60, and in London the rate is quoted at 1 pound = $1.62, financial arbitragers
might:
a. buy pounds in New York
b. sell dollars in London
c. simultaneously sell pounds in New York and buy dollars in London
d. simultaneously buy pounds in New York and sell dollars in London
Answer: d
2. If the exchange rate in New York for British pounds sterling is quoted at 1 pound = Formatted: Indent: Left: 0", First line: 0"
$1.60, and in London the rate is quoted at 1 pound = $1.62, financial arbitragers might:
a.buy pounds in New York Formatted: Indent: Left: 0", First line: 0", Right: 0", Tab
b.sell dollars in London stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.simultaneously sell pounds in New York and buy dollars in London
d.simultaneously sell pounds in New York and sell dollars in London
e.none of the above
Answer: e
23. The exchange rate is the rate at which a given unit of foreign currency is quoted in
terms of:
a. commodity prices
b. the domestic currency
c. the foreign currency
d. gold
Answer: b
4. The exchange rate is the rate at which a given unit of foreign currency is quoted in Formatted: Indent: Left: 0", First line: 0"
terms of:
a.commodity prices Formatted: Indent: Left: 0", First line: 0", Right: 0", Tab
b.barrels of oil stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.the foreign currency
d. gold
e.none of the above
Answer: e
35. Should a business fail after receiving shipping documents from its bank on the
basis of a trust receipt, the bank:
a. becomes a preferred creditor to the extent of the amount due less cash
deposits with the bank
b. repossesses the merchandise on the basis of a specific lien thereon
c. repossesses the merchandise on the basis of its holding of title to the
merchandise
d. has a prior claim relative to other general creditors
Answer: c
6. Should a business fail after receiving shipping documents from its bank on the
basis of a trust receipt, the bank:
a.becomes a preferred creditor to the extent of the amount due less cash deposits with the Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
bank Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
b.sells off the assets
c.auctions off the merchandise
d.has a prior claim relative to other general creditors
e.none of the above
Answer: e
Difficulty Level: Hard
47A. The traveler’s letter of credit is usually used by:

a. purchasing agents making purchases in foreign countries
b. individuals traveling abroad
c. importers’ banks
d. correspondent banks, in order to reduce shipment of gold between
countries
Answer: a
5.7B17. A A purchasing agent for a domestic art gallery touring foreign countries for Formatted: Strikethrough
possible acquisitions might find it convenient to have:
a. travelers’ checks
b. a commercial letter of credit
c. regular checkbook drafts
d. a traveler’s letter of credit
Answer: d
8. The traveler’s letter of credit is usually used by: Formatted: Indent: Left: 0", First line: 0"
a.travel agencies Formatted: Indent: Left: 0", First line: 0", Right: 0", Tab
b.individuals traveling abroad stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.importers’ banks
d.correspondent banks, in order to reduce shipment of gold between countries
e.none of the above
Answer: e
69. The Federal Reserve System:

a. permits member banks to accept drafts, but restricts the time period
involved only for exports. Commented [EN8]: In chapter?
b. actively encourages member banks to assist in financing international
transactions
c. discourages its member banks from accepting foreign drafts
d. limits the type of international transactions for which member banks may
accept drafts
Answer: b
10. The Federal Reserve System:

a. permits member banks to accept drafts, but restricts the time period
involved
b. actively encourages member banks to assist in financing international
transactions
c. discourages its member banks from accepting foreign drafts
d. limits the type of international transactions for which member banks may
accept drafts
e. all of the above
Answer: b
711. In recent years, the principal market for bankers’ acceptances has been:
a. domestic banks
b. domestic and foreign business corporations
c. foreign banks
d. none of the above
Answer: bC
12. In recent years, the principal market for bankers’ acceptances has been:
a.domestic banks Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
b.domestic business corporations Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.foreign business corporations
d.all of the above
e.none of the above
Answer: e
813. In the field of foreign trade, the most common form of credit instrument is the:
a. bankers’ acceptance
b. trust receipt
c. sight draft
Answer: a
14. In the field of foreign trade, the most common form of credit instrument is the:
a. commercial loan
b. trust receipt
c. sight draft
d. time draft
e. none of the above
Answer: e
915. The Export-Import Bank:

a. makes loans and offers guarantees to foreign exporters to the United
States
b. may offer emergency credits to assist other countries to maintain their
level of imports from the United States
c. makes loans or offers guarantees when the soundness of the
transaction is in doubt
d. makes loans to domestic exporters to encourage foreign trade
Answer: b
16. The Export-Import Bank: Tab stops: 0.79", Left + Not at 0.5" + 0.56"
a.makes loans and offers guarantees to foreign exporters to the United States Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
b.may offer emergency credits to assist other countries to maintain their level of exports to Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
the United States
c.makes loans or offers guarantees when the soundness of the transaction is in doubt
d.makes loans to domestic exporters to encourage foreign trade
e.none of the above
Answer: e
17. A purchasing agent for a domestic art gallery touring foreign countries for possible
acquisitions might find it convenient to have:
a.travelers’ checks Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
b.a commercial letter of credit Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.regular checkbook drafts
d.a traveler’s letter of credit
Answer: d
18. A purchasing agent for a domestic art gallery touring foreign countries for possible
acquisitions might find it convenient to have:
a.travelers’ checks Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
b.a commercial letter of credit Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.regular checkbook drafts
d.a great deal of cash in various currencies
e.none of the above
Answer: e
19. The lowest quotation on foreign exchange is given for: Commented [EN9]: Not in chapter
a.cable rates Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
b.banker’s time drafts Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.banker’s sight drafts
d.banker’s acceptance
Answer: b
20. The benefits of specialization of effort among nations depend primarily upon: Commented [EN10]: Not in chapter
a.geographical locations Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
b.market research Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.the existence of adequate financial facilities
d.accommodating laws and regulations
Answer: c
Subject Heading: International Trade
1021. In purchasing a claim to foreign exchange:

a. it is necessary only to go to a local bank
b. a permit must first be received from a Federal Reserve Bank
c. a bank specializing in foreign exchange must be contacted
d. a cable, telephone call, or letter must be directed to a foreign bank
Answer: a
1122. The price that an individual must pay when purchasing claims to foreign exchange:
a. is always higher than the basic quotation rate
b. is readily available in financial publications
c. is relatively constant from day to day
d. varies widely among sources of foreign exchangeall of the above are
true
Answer: a
1223. The effect of arbitrage activities in foreign exchange markets is to:

a. create disparity among the rates of various currencies
b. eliminate or reduce exchange rate quotation differentials
c. hinder the otherwise smooth functioning of the exchange markets
d. create wide swings in quotations from period to period
Answer: b
24. The effect of arbitrage activities in foreign exchange markets is to: Formatted: Indent: Left: 0", First line: 0"
a.create disparity among the rates of various currencies Formatted: Indent: Left: 0", First line: 0", Right: 0", Tab
b.maximize exchange rate quotation differentials stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.hinder the otherwise smooth functioning of the exchange markets
d.create wide swings in quotations from period to period
e.none of the above
Answer: e
1325. Before arbitragers take action with respect to exchange rate differentials:
a. central bank approval must be obtained
b. loans to cover transactions must be obtained
c. a market differential of at least 1¢ must exist between two currencies
d. a differential of as little as 1/16 of 1¢ may trigger action
Answer: d
26. Balances in foreign accounts are maintained for purposes of dealing in foreign Tab stops: 0.79", Left + Not at 0.5" + 0.56"
exchange by:
a.central banks Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
b.correspondents of domestic banks Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.correspondents or foreign branches of domestic banks
d.most multinational corporations
Answer: c
27. Balances in foreign accounts are maintained for purposes of dealing in foreign
exchange by:
a.central banks Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
b.correspondents of domestic banks Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.correspondents or foreign branches of domestic banks
d.most multinational corporations
Answer: c
Subject Heading: Foreign Exchange Commented [EN11]: Isn’t “all of the above” correct for #26,
27?
1429. If balances in a bank’s foreign accounts are substantially reduced due to an excess
of demand relative to supply:
a. loans are usually sought from central banks and other institutions to
replenish balances
b. they will buy currency from foreign exchange dealers price quotations are
adjusted to affect a reduction in demand and an increase in supply
c. currency may be shipped abroad for deposit in such accounts
d. Export-Import Bank loans are sought to bolster balances
Answer: b
30. Foreign exporters are usually quite willing to accept U.S. dollars in payment for Formatted: Strikethrough
goods and services because:
a.of the importance of the dollar in international trade Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
b.the value of the dollar does not fluctuate Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.they have little alternative
d.it is customary to receive payment denominated in the currency of the importer’s country
Answer: a
31. Foreign exporters are usually quite willing to accept Chinese Yuan in payment for
goods and services because:
a.of the importance of the Chinese Yuan in international trade Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
b.the value of the dollar does not fluctuate Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.they have little alternative
d.it is customary to receive payment denominated in the currency of the importer’s country
Answer: e
Subject Heading: Foreign Exchange Commented [EN12]: Not in chapter
1532. A domestic importer ordering foreign merchandise from a specific supplier would Formatted: Strikethrough
probably obtain from a Bank A:
a. a bankers’ brokers’ acceptance Commented [EN13]: Make this clearly incorrect
b. a traveler’s letter of credit
c. a commercial letter of credit
d. travelers’ checks
Answer: c
33. A banker’s sight draft differs from an ordinary bank check in that: Commented [EN14]: Not clear in the chapter
a.ordinary bank checks can be used only for domestic transactions Formatted: Indent: Left: 0", First line: 0"
b.ordinary bank checks are not guaranteed Formatted: Indent: Left: 0", First line: 0", Right: 0", Tab
c.they cost more stops: 0.5", Right + 0.56", Left + Not at 0.79"
d.they are drawn by one bank on another bank
Answer: d
1634. Foreign exchange hedging by a multinational corporation is:

a. a normal responsibility of foreign exchange specialists
b. not ordinarily considered to be prudent business
c. usually described in speculative terms
d. permitted only for defensive purposes
Answer: a
35. Foreign exchange hedging by a multinational corporation is: Formatted: Indent: Left: 0", First line: 0"
a.a normal responsibility of the company CEO Formatted: Indent: Left: 0", First line: 0", Right: 0", Tab
b.not ordinarily considered to be prudent business stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.usually described in speculative terms
d.permitted only for defensive purposes
e.none of the above
Answer: a
1736. The manager of the foreign exchange office of a multinational corporation could, in
anticipation of a decline in the value of currency of one of its foreign accounts:
a. borrow in that country and add to its account with that branch
b. accelerate the timing of remitting on the payables of that foreign branch
c. enter into a futures contract for delivery of that currency at today’s rate
d. shift funds from branches in other countries to that foreign branch
Answer: c
1837. Large multinational corporations enjoy special opportunities for risk reduction or
speculative gains from currency activities:
a. because of their influence on currency developments in the various
countries
b. since they can move balances from one country to another as monetary
conditions seem to warrant
c. because of their generally stronger credit ratings
d. because they always deal in currencies denominated in U.S. dollars
Answer: b
38. The firm that enters into a futures contract with respect to foreign exchange does Tab stops: 0.79", Left + Not at 0.5" + 0.56"
so:
a.to offset possible loss in its collection process by a gain in the delivery process of the Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
futures contract Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
b.in anticipation of an increase in the value of the currency of the country for which the
contract is established Commented [EN15]: Could be correct, too. Depends if they are
c.to decrease the cost of their sales transactions paying or receiving.
d.to eliminate a loss in the collection process of their accounts receivable in that country
Answer: a
39. The firm that enters into a futures contract with respect to foreign exchange does
so:
a.to offset possible loss in its collection process by a gain in the delivery process of the Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
futures contract Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
b.in anticipation of an increase in the value of the currency of the country for which the
contract is established
c.to decrease the cost of their sales transactions
d.to eliminate a loss in the collection process of their accounts receivable in that country
e.none of the above
Answer: a
40. The firm that enters into a futures contract with respect to foreign exchange does
so:
a. to speculate on the movement in the value of the currency
b. in anticipation of an increase in the value of the currency of the country
for which the contract is established
c. to decrease the cost of their sales transactions
d. to eliminate a loss in the collection process of their accounts receivable
in that country
Answer: e
1941. The exporter’s bank may offer considerable assistance to the exporter by:
a. accepting a bill of lading as security for a loan
b. arranging credit with the import’s bank
c. allowing the exporter to borrow against the security of a documentary
draft
d. issuing a letter of credit to the exporter
Answer: c
2042. Loans by an exporter’s bank based on the security of a documentary draft:

a. are supported entirely by the strength of the importer
b. are subject to the approval of the importer’s bank
c. are available only to exporters with strong credit ratings
d. have not only the financial strength of the exporter to support them, but
also that of the importer
Answer: d
2143. An importer will generally try to avoid making payment for a purchase before the
goods are actually shipped by:
a. purchasing a letter of credit
b. having payment sent to a bank in the exporter’s country to be held until
proper shipment is made
c. post-dating a check
d. insisting on payment only upon delivery
Answer: b
22.44 The commercial letter of credit is of special usefulness in international transactions

when the:
a. importer’s credit rating is either weak or not well known
b. exporter’s credit rating is weak, but the importer’s credit reputation is
strong
c. bank financing the importer’s transaction has very little confidence in the
customer’s ability to meet payments
d. exporter’s bank has little confidence in its customer’s ability to meet its
financial obligations
Answer: a
2345. A trust receipt as used in financing international transactions:

a. is issued by bonded warehouses for merchandise stored therein
b. allows the release of merchandise on a consignment basis by the bank
that issued the letter of credit
c. is evidence of ownership of funds held in escrow by the importer’s bank
d. is a negotiable instrument that trades freely in the money market
Answer: b
2446. In effect, the commercial letter of credit enables the importer to:
a. substitute the bank’s financial strength for his or her own
b. shift the burden of financing the transaction to the exporter
c. borrow from his or her bank on the basis of merchandise importer
d. have ample of time to sell the imported merchandise and meet payment
obligations
Answer: a
47. The Board of Governors of the Federal Reserve System considers bankers’
acceptances used in international trade to be: Commented [EN16]: Not in chapter
a.advantageous, but does not enter in bankers’ acceptance financing Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
b.outside the Fed’s realm of influence, neither encouraging nor discouraging their use Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.a hindrance to domestic monetary control efforts
d.very desirable and actually purchases and holds them in supporting the
market for such securities
Answer: d
2548. The attitude of central banks and commercial banks toward bankers’ acceptances:
a. has been favorable regarding bankers’ acceptances as attractive short-
term commitments
b. has never been constructive and has, in fact, been in opposition to their
use at times
c. is one of approval provided that before investing in such instruments
guarantees can be obtained from the Export-Import Bank
d. is irrelevant, since they are prevented from investing in such instruments
by regulations or laws
Answer: a
49. The attitude of central banks and commercial banks toward bankers’ acceptances: Tab stops: 0.79", Left + Not at 0.5" + 0.56"
a.has been unfavorable regarding bankers’ acceptances as attractive long-term Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
commitments Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
b.has never been constructive and has, in fact, been in opposition to their use at times
c.is one of approval provided that before investing in such instruments guarantees can be
obtained from the Export-Import Bank
d.is irrelevant, since they are prevented from investing in such instruments by regulations or
laws
Answer: e
50. Which of the following statements is most correct?

a.The benefits of international specialization of effort are so great that a nation should Commented [EN17]: Not in chapter
pursue such a policy irrespective of the policies of other nations. Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
b.Arbitrage in the international exchange market has the unfortunate effect of creating Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
instability in exchange rates.
c.The trust receipt is used by a bank in releasing shipping documents to a customer when
the bank wishes to retain title to the merchandise.
d.The bankers’ acceptance and the commercial letter of credit involve three principal
parties: the importer, the importer’s bank, and the exporter.
Answer: c
Subject Heading: Multiple Topics

a.The Export-Import Bank is a United States government-sponsored institution which is Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
owned by member banks that deal in financing foreign trade. Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
b.Foreign exchange markets can be characterized most properly as a communication
network among many financial institutions than as an identifiable geographic
location.
c.When a financial institution with accounts abroad sells claims against those accounts, it
must replenish those accounts by borrowing abroad or shipping currency.
d.The banker’s sight draft is the most expensive way to purchase a claim to foreign
exchange. Commented [EN18]: ????
Answer: b

a. Exporters may use sight or time drafts in billing foreign customers when
they have confidence in the purchaser’s ability and willingness to pay.
b. A time draft becomes a banker’s acceptance when the customer
receives, signs, and returns the draft to the exporter.
c. The currency rate is the rate at which a given unit of a foreign currency
is quoted in terms of gold.
d. All of the above statements are correct.
Answer: a
53. Which of the following statements is most correct? Formatted: Indent: Left: 0", First line: 0"
a.Importers may use sight or time drafts in billing foreign customers when they have no Formatted: Indent: Left: 0", First line: 0", Right: 0", Tab
confidence in the purchaser’s ability and willingness to pay. stops: 0.5", Right + 0.56", Left + Not at 0.79"
b.A time draft becomes a banker’s acceptance when the customer receives, signs, and
returns the draft to the exporter.
c.The currency rate is the rate at which a given unit of a foreign currency is quoted in terms
of gold.
d.All of the above statements are correct.
e.none of the above statements is correct.
Answer: e
2754. Which of the following statements is false?

a. Foreign banks, in addition to having correspondent relation with United
States banks, are permitted to set up subsidiaries in this country.
b. The trust receipt is used by a bank in releasing shipping documents to a
customer when the bank wishes to retain title to the merchandise.
c. A nation with relatively lower interest rate levels will have a relatively
stronger currency.
d. A nation with a relatively lower inflation rate will have a relatively
stronger currency.
Answer: c

a. An order bill of lading carries title to the goods being shipped.
b. There are no foreign offices of U.S. banks in foreign countries.
c. In dealing with a foreign bank, an exporter generally works through a
local subsidiary of that bank.
d. All of the above statements are false.
Answer: b
56. Which of the following statements is false? Formatted: Indent: Left: 0", First line: 0"
a.An order bill of lading carries title to the goods being shipped. Formatted: Indent: Left: 0", First line: 0", Right: 0", Tab
b.There are foreign offices of U.S. banks in foreign countries. stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.In dealing with a foreign bank, an exporter generally works through a local subsidiary of
that bank.
d.All of the above statements are false.
e.none of the above statements is false.
Answer: e

a. The prices quoted to the individual buyer of foreign exchange are always
in favor of the seller.
b. Subsidiary banking corporations established by foreign banks in this
country are not subject to any special restrictions because of foreign
ownership. An indirect quote is in terms of units of foreign currency per Commented [EN19]: Not in chapter
unit of the home country’s currency.
c. Economic risk reflects the uncertainty associated with national

government action that might affect asset values.
d. All the above statements are false.
Answer: c

a. The Board of Governors of the Federal Reserve System authorizes
member banks to accept drafts that arise in the course of certain types
of international transactions.
b. Multinational corporations may engage in foreign exchange management
for speculative purposes, as well as for defensive purposes.
c. Arbitrage in the foreign exchange market is the simultaneous purchasing
of commodities or securities in one market and selling them in another
where the price is higher.
d. All the above statements are correct.
Answer: d
3159. A draft that is not accompanied by any special documents and generally used
when the exporter has confidence in the importer’s ability to meet the draft when
presented is known as:
a. an order bill of lading
b. a clean draft
c. a documentary sight draft
Answer: b
3260. Under conditions of purchasing power parity (PPP), a country with a relatively
_______ expected inflation rate will have its currency _______ relative to a country
with a relatively _______ inflation rate.
a. higher, depreciate, lower
b. lower, depreciate, higher
c. higher, appreciate, lower
d. lower, appreciate, higher.
Answer: a
3361. Under conditions of interest rate parity (IRP), a country with a relatively _______
higher nominal interest rate will have its currency _______ relative to a country with
a relatively _______ nominal interest rate.
a. higher, depreciate, lower
b. lower, depreciate, higher
c. higher, appreciate, lower
d. lower, appreciate, higher.
Answer: a
3462. The _______ includes ALL international transactions.

a. balance of trade
b. balance of payments
c. current account balance
d. capital account balance
Answer: b
3563. A stronger U.S. dollar generally

a. results in more imports of foreign merchandise
b. leads to concern about worsening trade deficits
c. results in lower domestic inflation
d. all of the above
Answer: d
3663NEW. A weaker U.S. dollar generally Formatted: Indent: Left: 0", First line: 0"
a. helps U.S. exporting firms
b. reduces an existing U.S. trade deficit
c. leads to higher inflation in the U.S.
d. all of the above
Answer: d
Difficulty: Level: Easy
64. A stronger U.S. dollar generally Formatted: Indent: Left: 0", First line: 0"
a.results in more imports of foreign merchandise Formatted: Indent: Left: 0", First line: 0", Right: 0", Tab
b.leads to concern about worsening trade deficits stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.results in lower domestic inflation
d.all of the above
Answer: d
65. A stronger U.S. dollar generally
a.results in more imports of foreign merchandise Formatted: Indent: Left: 0", First line: 0", Right: 0", Tab
b.leads to concern about worsening trade deficits stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.results in lower domestic inflation
d.all of the above
e.none of the above
Answer: d
Subject Heading: Foreign Exchange Formatted: Indent: Left: 0", Tab stops: 0.79", Left
3766. Foreign exchange markets may be described as:

a. specific locations in major industrial cities
b. major financial centers connected by good communications systems
c. money markets outside of the United States
d. facilities of central banks for foreign exchange
Answer: b
3867. Quotations of foreign exchange rates in the many cities of the world are identical or
nearly so because of:
a. central bank control
b. price fixing
c. clearinghouse activities
d. arbitrage activities
Answer: d
68. The least costly form of claim in foreign exchange is a: Commented [EN20]: Not in chapter
a.banker’s sight draft Formatted: Indent: Left: 0", First line: 0"
b.cable order Formatted: Indent: Left: 0", First line: 0", Right: 0", Tab
c.time draft stops: 0.5", Right + 0.56", Left + Not at 0.79"
d.bill of exchange
Answer: c
369. A documentary draft is accompanied, among other things, by a (n):

a. order bill of lading
b. manifest
c. trust receipt
d. letter of credit
Answer: a
70. A bankers’ acceptance differs from a trade draft in that: Commented [EN21]: Not in chapter
a.it is drawn on a bank rather than on an importer Formatted: Indent: Left: 0", First line: 0"
b.it is always accompanied by a bank letter of credit Formatted: Indent: Left: 0", First line: 0", Right: 0", Tab
c.its acceptance depends entirely on the goodwill of the importer stops: 0.5", Right + 0.56", Left + Not at 0.79"
d.there is no difference
Answer: a
4071. Commercial letters of credit are:

a. customarily required by importers of their suppliers
b. negotiable in the money markets of major cities
c. customarily provided by banks to their customers to accommodate their
import activities
d. ordinarily provided by issuing bank at no charge to customers
Answer: a
4172. Traveler’s letters of credit are:

a. issued by a bank and addressed to a list of banks in other countries
b. especially popular with tourists
c. convertible into cash at most large banks
d. of special value to exporters
Answer: a
4273. To protect against loss as a result of adverse currency fluctuations, an export firm
may:
a. demand cash settlement
b. purchase use a futures contract as a hedge
c. require the customer to make payment in the exporter’s currency
d. require a government guarantee against currency loss of valueall of the
above are possible protections.
Answer: bd
100. To protect against loss as a result of adverse currency fluctuations, an export firm Formatted: Strikethrough
may:
b. sell a millennial contract as a hedge
d. require a government guarantee against currency loss of value
Answer: e
74. Intervention by central banks in the flexible exchange rate system is called:
a.clean float Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
b.flexible float Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.dirty float Commented [EN22]: Not in chapter
d.usage of Special Drawing Rights
Answer: c
4375. _________________________ was created to promote world trade through

monitoring and maintaining fixed exchange rates and by making loans to countries
with payments problems.
a. The World Bank
b. The International Monetary Fund
c. The International Bank for Reconstruction and Development
Answer: b
4476. _________________________ was created to help economic growth in developing

countries.
a. The World Bank
c. The Export-Import Bank
d. The Agency for International Development.
Answer: aB
78._________________________ was created to promote world trade through monitoring Formatted: Strikethrough
and maintaining fixed exchange rates and by making loans to countries with
payments problems.
a. The World Bank
c. The International Bank for Reconstruction and Development
Answer: b
4577. _________________________ was an international monetary system in which the

U.S. dollar was valued in gold and other exchange rates were pegged to the dollar.
a. The gold standard
b. The flexible exchange rate system
c. The Bretton Woods System
Answer: c
78. _________________________ was created to promote world trade through Formatted: Indent: Left: 0", First line: 0"
monitoring and maintaining fixed exchange rates and by making loans to countries with
payments problems.
a.The World Bank Formatted: Indent: Left: 0", First line: 0", Right: 0", Tab
b.The International Monetary Fund stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.The International Bank for Reconstruction and Development
d.none of the above
Answer: b
4679. The currency quotation method that indicates the amount of a home country’s
currency needed to purchase one unit of a foreign currency is called the
a. direct quotation method
b. indirect quotation method
c. floating exchange rate method
Answer: a
4780A. Key factors that influence currency exchange rates include all of the following
EXCEPT:
a. supply and demand relationships
b. inflation rates
c. interest rates
d. all of the above influence exchange rates
Answer: d
4880B81. Key factors that influence currency exchange rates include all of the Formatted: Not Strikethrough
following EXCEPT: Formatted: Strikethrough
a. supply and demand relationships
b. legal constraints
c. interest rates
d. inflation rates
Answer: b
82. Key factors that influence currency exchange rates include all of the following
EXCEPT:
a.supply and demand relationships Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
b.legal constraints Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.interest rates
d.inflation rates
Answer: b
4983. If the U.S. inflation rate is expected to be 3 percent next year, the European
inflation rate is expected to be 4% next year, and the spot rate between the euro
and dollar is $1.30, then according to purchasing power parity, we would expect the
dollar to _________ against the euro from $1.30 to __________:
a. appreciate, $1.2875
b. appreciate, $1.3126
c. depreciate, $1.2875
d. depreciate, $1.3126
Answer: a
5084. If U.S. interest rates are expected to be 6 percent next year, European interest
rates are expected to be 4 percent next year, and the spot rate between the euro
and dollar is $1.30, then according to interest rate parity, we would expect the
dollar to _________ against the euro from $1.30 to __________:
a. appreciate, $1.275
b. appreciate, $1.325
c. depreciate, $1.275
d. depreciate, $1.325
Answer: d
5185. Purchasing commodities, securities, or bills of exchange in one market and

immediately selling them in another to make a profit from price differences in the
two markets is called:
a. profiteering
b. skimming
c. arbitrage
d. all of the above
Answer: c
5286. An unconditional order for the payment of money from one person to another is
called a (n)
a. bill of exchange
b. sight draft
c. time draft
d. documentary draft
Answer: a
5387. A draft that is accompanied by an order bill of lading and other documents is called
a (n)
a. bill of exchange
b. sight draft
c. time draft
Answer: d
5488. A draft requiring immediate payment is called a (n)

a. bill of exchange
b. sight draft
c. time draft
Answer: b
5589. A statement by a bank guaranteeing acceptance and payment of a draft up to a

stated amount is called a (n)
a. bill of exchange
b. commercial letter of credit
c. time draft
Answer: b
5690. An instrument through which a bank retains title to goods until they are paid for is
called a (n)
a. bill of exchange
c. trust receipt
Answer: c
5791. A promise of future payment issued by a firm guaranteed by a bank is called a (n)
a. bill of exchange
c. banker’s acceptance
Answer: c
5892. For most of the remainder of the decade after the September 11th terrorist attacks:
a. the Fed then maintained a high liquidity, low interest rate environment.
b. the Fed then maintained a low liquidity, low interest rate environment.
c. the Fed then maintained a low liquidity, high interest rate environment.
d. the Fed then maintained a high liquidity, high interest rate environment.
Answer: a
Subject Heading: International Trade Policy
93. For most of the remainder of the decade after the September 11th terrorist attacks:
a.the Fed then maintained a neutral liquidity, stable interest rate environment. Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
b.the Fed then maintained a low liquidity, low interest rate environment. Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.the Fed then maintained a low liquidity, high interest rate environment.
d.the Fed then maintained a high liquidity, high interest rate environment.
e.none of the above
Answer: e
94. For most of the remainder of the decade after the September 11th terrorist attacks
the Fed maintained a high liquidity, low interest rate environment, which was
accompanied by:
a.very little borrowing by business firms, financial institutions, and individuals. Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
b.large amounts of borrowing by business firms, financial institutions, and individuals.
c.a massive divestment of assets by business firms, financial institutions, and individuals.
d.a massive reduction of inventory levels by business firms.
e.none of the above
Answer: b
95. For most of the remainder of the decade after the September 11th terrorist attacks
the Fed maintained a high liquidity, low interest rate environment, which was
accompanied by:
a.very little borrowing by business firms, financial institutions, and individuals. Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
b.a large increase in overseas investments by business firms, financial institutions, and Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
individuals.
c.a massive divestment of assets by business firms, financial institutions, and individuals.
d.a massive reduction of inventory levels by business firms.
e.none of the above
Answer: e
96. During the latter part of the decade ending in 2010:

a.housing prices peaked in 2006. Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
b.stock prices peaked in 2007. Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.debt-heavy individuals and business firms default rates skyrocketed.
d.the U.S. dollar declining rapidly against an index of major currencies.
e.all of the above
Answer: e
97. During the latter part of the decade ending in 2010:

a.housing prices bottomed out in 2006. Formatted: Indent: Left: 0", Hanging: 0.56", Right: 0",
b.stock prices reached a low in 2007. Tab stops: 0.5", Right + 0.56", Left + Not at 0.79"
c.individuals and business firms reduced borrowing and default rates declined.
d.the U.S. dollar rose rapidly against an index of major currencies.
e.none of the above
Answer: e
5998A. Which of the following statements is most correct?

a. A weaker dollar results in more imports of foreign merchandise since it
requires fewer dollars for purchase.
b. A stronger dollar results in fewer imports of foreign merchandise since it
c. A stronger dollar results in more imports of foreign merchandise since it
d. A weaker dollar results in more imports of foreign merchandise since it
requires more dollars for purchase.
Answer: c
6098B99. Which of the following statements is most correct? Formatted: Not Strikethrough
a. A weaker dollar results in more imports of foreign merchandise since it Formatted: Strikethrough
b. A stronger dollar results in fewer imports of foreign merchandise since it
c. A stronger dollar results in more imports of foreign merchandise since it
d. A weaker dollar results in more imports of foreign merchandise since it
Answer: e
61. The U.S Balance of Payments involves all of the following except: Formatted: Indent: Left: 0"
a. Foreign investment, Formatted: Indent: Left: 0", Tab stops: 0.56", Left + Not
b. Private grants at 0.79"
c. Government grants Formatted: Font: (Default) Arial
d. U.S. military spending overseas Formatted: Font: (Default) Arial
e. Commercial bank deposits in dollars from foreigners
Formatted: Font: (Default) Arial
Answer: e Formatted: Font: (Default) Arial

Difficulty Level: Medium Formatted: Font: (Default) Arial
62. Which factor does not impact international trade balances? Formatted: Font: (Default) Arial
a. The exchange value of the U.S. dollar relative to other currencies Formatted: Font: (Default) Arial
b. How often the government sells treasury bills
c. Relative inflation rates
d. Economic growth
e. The prices of goods in the U.S.
Answer: b
63. The ___________________ shows the flow of income into and out of the Formatted: Indent: Left: 0", Hanging: 0.56", Tab stops:
United States during a specified period. 0.56", Left + Not at 0.79"
a. Balance of payments Formatted: Font: (Default) Arial
b. Capital Account balance
c. Current Account balance
d. Merchandise Trade balance
e. Balance of trade
Answer: c
Subject Heading: Current Account
64. All of the following affect the balance of the capital account except:
a. Bank deposits Formatted: Font: (Default) Arial
b. Purchases of government and corporate securities
c. Purchases of goods and services
d. Loans
e. Direct investment in land and buildings
Answer: c
Subject Heading: Capital Account
65. When the flow of income into the United States exceeds the flow of income Formatted: Font: (Default) Arial
out of the United States, it creates a: Formatted: Line spacing: single
a. Current account surplus Formatted: Font: (Default) Arial

b. Curent account deficit Formatted: Font: (Default) Arial
c. Capital account surplus
d. Capital account deficit
e. Trade deficit Formatted: Normal, Indent: First line: 0.5", Line spacing:
single
Answer: a
Subject Heading: Current Account Formatted: Font: (Default) Arial
Formatted: Indent: Left: 0", Right: 0", Tab stops: Not at
0.79"
100. To protect against loss as a result of adverse currency fluctuations, an
export firm may:
b. sell a millennial contract as a hedge
d. require a government guarantee against currency loss of value
Answer: e
MISSING TOPICS: PAGE 148-151

BOP
BOT
CAPITAL ACCOUNT
CURRENT ACCOUNT
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Introduction to Finance Markets

Investments and Financial Management

Formatted: Indent: Left: 0", First line: 0"

178. Slow economic growth in investments in another country would be an example of

Formatted: Indent: Left: 0", First line: 0"

224. An expected decline in a country’s currency may lead to an attempt to accelerate

235. An instrument requiring immediate payment is classified as a time draft.

3640. The European Economic Organization (EEO) is an organization of twelve

Formatted: Indent: Left: 0"

47A. The traveler’s letter of credit is usually used by:

69. The Federal Reserve System:

10. The Federal Reserve System:

915. The Export-Import Bank:

1021. In purchasing a claim to foreign exchange:

1223. The effect of arbitrage activities in foreign exchange markets is to:

1634. Foreign exchange hedging by a multinational corporation is:

2042. Loans by an exporter’s bank based on the security of a documentary draft:

22.44 The commercial letter of credit is of special usefulness in international transactions

2345. A trust receipt as used in financing international transactions:

50. Which of the following statements is most correct?

51. Which of the following statements is most correct?

2652. Which of the following statements is most correct?

2754. Which of the following statements is false?

2855. Which of the following statements is false?

2957. Which of the following statements is false?

c. Economic risk reflects the uncertainty associated with national

3058. Which of the following statements is false?

3462. The _______ includes ALL international transactions.

3563. A stronger U.S. dollar generally

3766. Foreign exchange markets may be described as:

369. A documentary draft is accompanied, among other things, by a (n):

4071. Commercial letters of credit are:

4172. Traveler’s letters of credit are:

4375. _________________________ was created to promote world trade through

4476. _________________________ was created to help economic growth in developing

4577. _________________________ was an international monetary system in which the

5185. Purchasing commodities, securities, or bills of exchange in one market and

5488. A draft requiring immediate payment is called a (n)

5589. A statement by a bank guaranteeing acceptance and payment of a draft up to a

96. During the latter part of the decade ending in 2010:

97. During the latter part of the decade ending in 2010:

5998A. Which of the following statements is most correct?

Answer: e Formatted: Font: (Default) Arial

a. Current account surplus Formatted: Font: (Default) Arial

MISSING TOPICS: PAGE 148-151

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