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1. When a company needs to purchase foreign currency for immediate delivery today 2 days to pay its foreign vendor for merchandise the company will purches the FX from its bank at the

a) Future price

b) Forward price

c) Spot price

d) West side price

2. If a U.S. firm desire avoid the risk from exchange rate fluctuations, and it is receiving 100.000 euros in 90 days from a customer in France, it could

A) Obtain a 90-day forward purchase contract on euros.

B) Obtain a 90-day forward sale contract on euros

C) Purchase euros 90 days from now at the spot rate,

D) Sell euros 90 days from now at the spot rate

3. According to the Madura to 1971, the exchange rate between any two currencies was typically:

A) Fixed within narrow boundaries.

b) Floating, but subject to central bank intervention.

C) Floating, and not subject to central bank intervention.

D) Nonexistent; that is currencies were not exchanged, but gold was used to pay for all foreign transactions.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92372690

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