1. The territorial approach to taxation policy is also termed the ________ approach.

a. location

b. ethical

c. greedy

d. source

2. Export receivables are normally sold at a discount. The size of the discount depends on the following factors EXCEPT:

a. size of financing and services fees

b. overdraft fees

c. collection risk

d. cost of credit insurance

3. Assume the current U.S. dollar-British spot rate is 0.6993£/$. If the current nominal one-year interest rate in the U.S. is 5% and the comparable rate in Britain is 6%, what is the approximate forward exchange rate for 360 days?

a. £1.42/$

b. £1.43/$

c. £0.6927/$

d. £0.7060/$

4. For firms to raise capital in international markets, it is more important to adhere to capital structure ratios similar to those found in the United States and United Kingdom than to those in the firm's home country.

True

False

5. A ________ transaction in the foreign exchange market requires an almost immediate delivery (typically within two days) of foreign exchange.

a. none of the other answers

b. spot

c. forward

d. futures