International Business – Chapter 10 Quiz (Exam 2) – Questions and
Solutions – 2025/2026
Where is the foreign exchange market located? - ANS✔✔ the foreign exchange market is not
located in any one place; it is a global network of banks, brokers, and foreign exchange dealers
connected by electronic communications systems
Where are the most important trading centers? - ANS✔✔ London, New York, Zurich, Tokyo, and
Singapore
What are two significant features of the foreign exchange market? - ANS✔✔ (1) it never sleeps
and (2) high-speed computer linkages between trading centers around the globe have
effectively created a single market
The extent to which a firm's future international earning power is affected by changes in
exchange rates is called - ANS✔✔ economic exposure
Why do you think the value of the Indian rupee declined against that of the U.S. dollar after the
U.S. Fed had announced that it would begin to wind down its economic stimulus program? -
ANS✔✔ increase in U.S. interest rate and India's dependence on U.S. capital
The U.S. dollar appreciated relative to other major trading currencies between 2014 and early
2016 primarily because - ANS✔✔ the U.S. economy had emerged from the great recession in
better shape than that of any other developed nation
Which of the following occurred as a result of increased demand for the dollar following the
2008 great recession? - ANS✔✔ the value of the dollar rose relative to foreign currencies
Which of the following occurred as a result of the strong U.S. dollar from 2014 to 2016? -
ANS✔✔ the price of U.S. exports rose
Solutions – 2025/2026
Where is the foreign exchange market located? - ANS✔✔ the foreign exchange market is not
located in any one place; it is a global network of banks, brokers, and foreign exchange dealers
connected by electronic communications systems
Where are the most important trading centers? - ANS✔✔ London, New York, Zurich, Tokyo, and
Singapore
What are two significant features of the foreign exchange market? - ANS✔✔ (1) it never sleeps
and (2) high-speed computer linkages between trading centers around the globe have
effectively created a single market
The extent to which a firm's future international earning power is affected by changes in
exchange rates is called - ANS✔✔ economic exposure
Why do you think the value of the Indian rupee declined against that of the U.S. dollar after the
U.S. Fed had announced that it would begin to wind down its economic stimulus program? -
ANS✔✔ increase in U.S. interest rate and India's dependence on U.S. capital
The U.S. dollar appreciated relative to other major trading currencies between 2014 and early
2016 primarily because - ANS✔✔ the U.S. economy had emerged from the great recession in
better shape than that of any other developed nation
Which of the following occurred as a result of increased demand for the dollar following the
2008 great recession? - ANS✔✔ the value of the dollar rose relative to foreign currencies
Which of the following occurred as a result of the strong U.S. dollar from 2014 to 2016? -
ANS✔✔ the price of U.S. exports rose
