D311 Midterm 3 Exam 2024| Questions with 100%
Correct Answers |Verified
Which of the following is one of the major noneconomic rationales for government intervention
in trade? - ✔✔preserving national culture
represent(s) a form of direct assistance to local companies to boost their competitiveness. -
✔✔subsidies
A company's objection to protection of its own industry usually stems from its own competitive
advantage in all of the following areas EXCEPT - ✔✔foreign direct investments
According to the case on U.S. imports of prescription drugs from Canada, pharmaceutical
companies in the U.S. insist that they would have to greatly reduce their research budgets if -
✔✔they lost the ability to charge high prices in the U.S. when they introduce new drugs
Which of the following is not among the reasons why the US government started to levy high
tariffs on Chinese products imported into the United States: - ✔✔The high FDI by Chinese
companies in the US
According to the online articles from January 2020, the trade war between the US and China
has led to: - ✔✔-Difficulties for farmers in the US
-Difficulties for manufacturers in the US
-Higher prices for consumers in the US
China's exports are surging despite US tariffs and the COVID-19 pandemic. According to the
New York Times article from August 31, which of the following is not among the reasons for this
surge? - ✔✔The US suspended most of its tariffs on Chinese products in March 2020.
, Which term refers to money denominated in the currency of another nation or group of
nations? - ✔✔Foreign exchange
What is the current USD/EUR exchange rate? Please provide four decimal places. - ✔✔.8223
In foreign-exchange markets, reporting dealers are - ✔✔financial institutions that actively
participate in local and global foreign-exchange markets
________ involve the exchange of currency the second day after the date on which the two
foreign-exchange traders agree to the transaction. - ✔✔spot transactions
In which of the following transactions is a currency switched with another on one date and then
switched back on a future date? - ✔✔FX Swap
In the spot market, the ________ is the difference between the bid and offer rates and is the
trader's profit margin. - ✔✔spread
Melissa, a foreign-exchange trader, wants to buy euros from Stephanie. Which of the following
is the price at which Melissa is willing to buy euros? - ✔✔Bid
If a foreign currency is quoted in American terms (the direct quote) and the forward rate for a
foreign currency is less than the spot rate, the foreign currency is selling at a - ✔✔Forward
discount
A(n) ________ is the right but not the obligation to buy or sell a foreign currency within a
certain time period or on a specific date at a specific exchange rate. - ✔✔option
Anita, an employee at ABX Partners, a hedge fund firm, has purchased euros because she
believes that the euro will strengthen against other currencies. Which term best describes
Anita's activities? - ✔✔speculation
Correct Answers |Verified
Which of the following is one of the major noneconomic rationales for government intervention
in trade? - ✔✔preserving national culture
represent(s) a form of direct assistance to local companies to boost their competitiveness. -
✔✔subsidies
A company's objection to protection of its own industry usually stems from its own competitive
advantage in all of the following areas EXCEPT - ✔✔foreign direct investments
According to the case on U.S. imports of prescription drugs from Canada, pharmaceutical
companies in the U.S. insist that they would have to greatly reduce their research budgets if -
✔✔they lost the ability to charge high prices in the U.S. when they introduce new drugs
Which of the following is not among the reasons why the US government started to levy high
tariffs on Chinese products imported into the United States: - ✔✔The high FDI by Chinese
companies in the US
According to the online articles from January 2020, the trade war between the US and China
has led to: - ✔✔-Difficulties for farmers in the US
-Difficulties for manufacturers in the US
-Higher prices for consumers in the US
China's exports are surging despite US tariffs and the COVID-19 pandemic. According to the
New York Times article from August 31, which of the following is not among the reasons for this
surge? - ✔✔The US suspended most of its tariffs on Chinese products in March 2020.
, Which term refers to money denominated in the currency of another nation or group of
nations? - ✔✔Foreign exchange
What is the current USD/EUR exchange rate? Please provide four decimal places. - ✔✔.8223
In foreign-exchange markets, reporting dealers are - ✔✔financial institutions that actively
participate in local and global foreign-exchange markets
________ involve the exchange of currency the second day after the date on which the two
foreign-exchange traders agree to the transaction. - ✔✔spot transactions
In which of the following transactions is a currency switched with another on one date and then
switched back on a future date? - ✔✔FX Swap
In the spot market, the ________ is the difference between the bid and offer rates and is the
trader's profit margin. - ✔✔spread
Melissa, a foreign-exchange trader, wants to buy euros from Stephanie. Which of the following
is the price at which Melissa is willing to buy euros? - ✔✔Bid
If a foreign currency is quoted in American terms (the direct quote) and the forward rate for a
foreign currency is less than the spot rate, the foreign currency is selling at a - ✔✔Forward
discount
A(n) ________ is the right but not the obligation to buy or sell a foreign currency within a
certain time period or on a specific date at a specific exchange rate. - ✔✔option
Anita, an employee at ABX Partners, a hedge fund firm, has purchased euros because she
believes that the euro will strengthen against other currencies. Which term best describes
Anita's activities? - ✔✔speculation
