Test bank International Finance MCQ (word)chap 3.docVIP

Fundamentals of Multinational Finance, 3e (Moffett) Chapter 3 The International Monetary System 3.1 Multiple Choice and True/False Questions 1) The price of one countrys currency in units of another currency or commodity is the ________. A) foreign interest rate B) foreign currency exchange rate C) par value D) international rate Answer: B Topic: Currency Terminology Skill: Recognition 2) A country that regulates the rate at which its currency is exchanged for all other currencies is considered to have a ________ exchange rate system. A) fixed or managed B) floating or flexible C) forward D) spot Answer: A Topic: Currency Terminology Skill: Recognition 3) You check the Y currency web page and find that the Japanese yen is trading at a rate of 113 yen per dollar. This rate of exchange is typically referred to as the ________. A) forward rate B) par rate C) spot rate D) 113 rate Answer: C Topic: Currency Terminology Skill: Conceptual 4) The drop in value of a currency pegged to gold or another currency is known as ________. A) revaluation B) depreciation C) deterioration D) devaluation Answer: D Topic: Currency Terminology Skill: Conceptual 5) A ________ currency is expected to devalue or depreciate relative to major currencies. A) soft or weak B) hard or strong C) deteriorated D) devalued Answer: A Topic: Currency Terminology Skill: Conceptual 6) The increase in value of a currency pegged to gold or another currency is known as ________. A) appreciation B) revaluation C) strengthened D) hardened Answer: B Topic: Currency Terminology Skill: Conceptual 7) A currency that has increased in foreign exchange value relative to a floating rate currency has ________. A) revalued B) violated international trade agreements C) appreciated D) deteriorated Answer: C Topic: Currency Termin