# ﻿GBM 381 Week 2 Quiz

## ﻿GBM 381 Week 2 Quiz

﻿GBM 381 Week 2 Quiz
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1.  A television costs 600 Canadian dollars (CAD) in Canada and 500 US dollars (USD) in the US.  The exchange rate between the Canadian dollar and the US dollar is:
1. 1.2 CAD per 1 USD
2. 1.2 USD per 1 CAD
3. .833 CAD per 1 USD
4. Cannot determine

2. An exchange rate is defined as:
1. the interest rate at which currencies can borrowed
2. the domestic currency price of the foreign currency
3. the ratio of export prices to import prices
4. The domestic currency price of a market basket of the most traded currencies in the world

3. If the US dollar price of the Japanese yen changes from \$1 per 100 yen to \$1.50 per 100 yen, the dollar is said to have _____________ and the yen has ______________.
1. appreciated, depreciated
2. depreciated, appreciated
3. appreciated, appreciated
4. depreciated, depreciated

4. A foreign currency is said to have appreciated against the dollar when:
1. the dollar price of the currency has increased
2. the foreign currency price of the dollar has increased
3. the exchange rate of both currencies with respect to the euro has increased
4. the exchange rate for both currencies with respect to a third currency has decreased

5. If you have a commitment to pay a friend in Britain 1,000 pounds in 30 days, and you are holding US dollars, you could remove the risk of loss due to the appreciation of the pound by:
1. Buying dollars in the 30-day forward market
2. Selling dollars in the 30-day forward market
3. Buying pounds in the 30-day forward market
4. Selling pounds in the 30-day forward market

6. Suppose the exchange rate of the British pound is \$1.75 per pound while the exchange value of the Swiss franc is \$0.667 cents per franc.  The cross exchange rate between the pound and the franc is:
1. .381 franc per pound
2. 1.167 francs per pound
3. Cannot determine
4. 2.624...