Which of the following is true regarding Bretton Woods Agreement EXCEPT _______. A. silver replaces gold as the medium of exchange B. every currencies are backed by gold C. declaring fixed exchange rates between currencies D. government intervention to limit exchange rates fluctuation above or below their initially established levels

Which of the following is true regarding Bretton Woods Agreement EXCEPT _______. A. silver replaces gold as the medium of exchange B. every currencies are backed by gold C. declaring fixed exchange rates between currencies D. government intervention to limit exchange rates fluctuation above or below their initially established levels

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter2: International Flow Of Funds

Section: Chapter Questions

Problem 5QA

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Description A system in which exchange rates are held constant A system in which exchange rates are determined by market forces, rather than government intervention A system in which exchange rates are allowed to fluctuate, but are subject to government intervention A system in which the home currency is synchronized with the value of a particular foreign currency One advantage of a Fixed Exchange Rate Systems Managed Float Freely Floating O Pegged O exchange rate system is that the country with such a system is less affected by inflation in other countries.
urgent no cahtgpt answer. What is the principal function of the foreign exchange market? A. To transfer purchasing power from one nation to another in exchange for currency B. To maintain fixed exchange rates that remain unaffected by market forces C. To facilitate foreign direct investment D. None of the above
Which of the following statements is/are not related to the Bretton Woods Agreement? I. Bretton Woods Agreement called for fixed exchange rates between currencies. II. Governments intervened to prevent exchange rates from moving more than 1 percent above or below their initially established levels. III. The agreement lasted from 1944 until 1971. IV. Every national currencies would be backed by gold. A. I, III, IV B. None C. II D. II, III
Exchange rate is:Select one:a. All of the given answers.b. The rate at which one currency can be exchanged for another.c. Not defined in AASB 121.d. The difference between the currency rates.
Compared to a fixed exchange rate, a monetary union Select one: A. involves soft pegs. B. does not allow adjustments to exchange rates. C. is managed at the International Monetary Fund. D. has no central bank.
Question: 1 . Which of the following is not correct? Choices: Premium arises when the spot rate is higher than that of the forward rate Indirect quotation shows the number of units of a domestic currency corresponding to one unit of foreign currency Financial effects of possible stock market crashes can be mitigated through purchasing and holding golds Exchange rates is one of the vital factors in considering whether or not to invest in a security issued by entities from the other countries 2 . Which is not true with regards to risk management? Choices: Bankruptcy that arises from volatility of cash inflows can be mitigated through proper risk forecast and management Securities may be subjected to security price risk One of the ways to mitigate relevant risk is to increase the probability of occurrence of an adverse event Identifying the risk that the firm faces is the first step in risk management
Which one of the following is not true regarding a currency board? O Currency board holds international reserve assets. O Currency in circulation is a liability in the balance sheet of the currency board. O Currency board is a way of implementing a floating exchange rate regime.
On initial recognition of IFRS, a foreign currency transaction should be recorded at:A. the spot exchange rateB. Forward exchange rateC. Historical exchange rate D. All of the aboveE. None of the abov
Under a flexible exchange rate system, a decrease in the value of a domestic currency in terms of foreign currencies is referred to as Answer 1. an appreciation. 2. a depreciation. 3. a devaluation. 4. a revaluation.
Which of the following statement is incorrect? O Currency crisis is more likely happen under the fixed exchange rate system. O Capital flight is more likely occur under the fixed exchange rate system. Fixed exchange rate regime relied on the ability of central banks to intervene in the currency market. O China is taking free floating exchange rate system.
Title: Identification Things to do: 1. A second function of the foreign exchange market is to provide exchange possibility that unpredicted changes future exchange rates adverse consequences for the firm. insurance against risk, which is the in will have exchange rate is the rate foreign exchange dealer 2. The at which a converts currency into another one currency on a particular day. 3. The value of a is determined by the interaction between the demand and supply of that currency relative to the demand and supply of other currencies. 4. A parties agree exchange occurs to exchange currency when two and execute the deal at some specific date in the future. 5. rates governing such future transactions are referred to as forward exchange rates. 6. Changes in be problematic for an business. exchange rates can international 7. A is the simultaneous purchase and sale of a given amount of foreign exchange for two different value dates. 8. When a firm enters into a it is taking out possibility…
Which of the following statement is NOT true regarding a foreign currency transaction? a. When a transaction is denominated in a foreign currency (FC) and measured in dollars, changes in exchange rates between the transaction date and the settlement date expose the domestic company to exchange gains or losses. b. If an FC transaction is unsettled at the end of the accounting period, the exchange gains/losses should be accrued. c. When a transaction is denominated and measured in dollars, changes in exchange rates do not expose the domestic company to exchange gains or losses. d. Changes in exchange rates expose the domestic company to exchange gains or losses only when the company purchases goods from a foreign company.