MAN 3600 EXAM 3 2025 QUESTIONS AND
ANSWERS
Which of the following is characteristic of the fixed exchange rate system?
a. allows for monetary policy flexibility
b. value of currency is set relative to the value of another
c. rates based on supply and demand forces
d. utilized by most advanced economies - ANS b. value of currency is set relative to the value
of another
which of the following statements is most likely to be true regarding a currency's price if the
supply of the currency increases?
a. the price of currency increases
b. the price of currency goes down
c. the price of the currency remains constant
d. the price of the currency fluctuates randomly - ANS b. the price of currency goes down
you are given an exchange rate of $1.40/GBP. which of the following is true?
a. us terms and direct quotation for dollar
b. european terms and direct quotation for dollar
c. european terms and direct quotation for GBP
d. us terms and direct quotation for GBP
e. cross rate and direct quotation for dollar - ANS a. us terms and direct quotation for dollar
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,which of the following statements is true about currencies?
a. the british pound is an example of a nonconvertible currency
b. currencies that are used for international transactions are called non convertible
c. hard currencies are highly unstable currencies
d. convertible currencies can be readily exchanged for other currencies. - ANS d. convertible
currencies can be readily exchanged for other currencies.
If last year one dollar equaled one euro, and then the exchange rate shifted so that today one
dollar equals two euros, which of the following would most likely NOT occur?
a. european firms would lower their prices on goods made with us parts
b. fewer europeans would travel to the us or study at us universities
c. european consumers would purchase fewer us products and services
d. european firms would pay more for raw material imported from the united states - ANS a.
european firms would lower their prices on goods made with us parts
assume that the price of big mac in japan in yen750 while that in the united states is $5.50. if
the yen dollar exchange rate is 125yen/dollar, what is the valuation of japanese yen?
a. undervalued by 135.4%
b. overvalued by 135.4%
c. overvalued by 13,536.4%
d. overvalued by 9.1%
e. undervalued by 9.1% - ANS d. overvalued by 9.1%
If the Euro-Dollar exchange rate moves to $1.25/Euro from $1.10/Euro a year ago, what is the
percentage change of Dollar?
a. value increase by 12%
b. value decrease by 12%
c. value decrease by 13.6%
d. value increase by .136%
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, e. value increase by 13.6% - ANS b. value decrease by 12%
which of the following documents is the contract (receipt) between the shipping company and
the exporter?
a. pro forma invoice
b. bill of lading
c. export declaration
d. commercial invoice - ANS b. bill of lading
The level of control a firm is seeking when deciding the mode of foreign market entry is
___________.
a. environmental factor
b. an internal factor
c. an external factor
d. management factor
e. none of above - ANS d. management factor
according to the letter of credit process presented in the course materials, the final step is to
___.
a. collect the payment from the importer by the importer's bank
b. send the payment to the exporter's bank by the importer's bank
c. submit export documentation to the exporters bank by the exporter
d. ship the products to the importer by the exporter - ANS a. collect the payment from the
importer by the importer's bank
in the beginning of international venture, a firm most likely experience ____.
a. increasing risk and decreasing profits
b. decreasing risk and increasing profits
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ANSWERS
Which of the following is characteristic of the fixed exchange rate system?
a. allows for monetary policy flexibility
b. value of currency is set relative to the value of another
c. rates based on supply and demand forces
d. utilized by most advanced economies - ANS b. value of currency is set relative to the value
of another
which of the following statements is most likely to be true regarding a currency's price if the
supply of the currency increases?
a. the price of currency increases
b. the price of currency goes down
c. the price of the currency remains constant
d. the price of the currency fluctuates randomly - ANS b. the price of currency goes down
you are given an exchange rate of $1.40/GBP. which of the following is true?
a. us terms and direct quotation for dollar
b. european terms and direct quotation for dollar
c. european terms and direct quotation for GBP
d. us terms and direct quotation for GBP
e. cross rate and direct quotation for dollar - ANS a. us terms and direct quotation for dollar
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,which of the following statements is true about currencies?
a. the british pound is an example of a nonconvertible currency
b. currencies that are used for international transactions are called non convertible
c. hard currencies are highly unstable currencies
d. convertible currencies can be readily exchanged for other currencies. - ANS d. convertible
currencies can be readily exchanged for other currencies.
If last year one dollar equaled one euro, and then the exchange rate shifted so that today one
dollar equals two euros, which of the following would most likely NOT occur?
a. european firms would lower their prices on goods made with us parts
b. fewer europeans would travel to the us or study at us universities
c. european consumers would purchase fewer us products and services
d. european firms would pay more for raw material imported from the united states - ANS a.
european firms would lower their prices on goods made with us parts
assume that the price of big mac in japan in yen750 while that in the united states is $5.50. if
the yen dollar exchange rate is 125yen/dollar, what is the valuation of japanese yen?
a. undervalued by 135.4%
b. overvalued by 135.4%
c. overvalued by 13,536.4%
d. overvalued by 9.1%
e. undervalued by 9.1% - ANS d. overvalued by 9.1%
If the Euro-Dollar exchange rate moves to $1.25/Euro from $1.10/Euro a year ago, what is the
percentage change of Dollar?
a. value increase by 12%
b. value decrease by 12%
c. value decrease by 13.6%
d. value increase by .136%
2 @COPYRIGHT THEBRIGHT 2025/2026
, e. value increase by 13.6% - ANS b. value decrease by 12%
which of the following documents is the contract (receipt) between the shipping company and
the exporter?
a. pro forma invoice
b. bill of lading
c. export declaration
d. commercial invoice - ANS b. bill of lading
The level of control a firm is seeking when deciding the mode of foreign market entry is
___________.
a. environmental factor
b. an internal factor
c. an external factor
d. management factor
e. none of above - ANS d. management factor
according to the letter of credit process presented in the course materials, the final step is to
___.
a. collect the payment from the importer by the importer's bank
b. send the payment to the exporter's bank by the importer's bank
c. submit export documentation to the exporters bank by the exporter
d. ship the products to the importer by the exporter - ANS a. collect the payment from the
importer by the importer's bank
in the beginning of international venture, a firm most likely experience ____.
a. increasing risk and decreasing profits
b. decreasing risk and increasing profits
3 @COPYRIGHT THEBRIGHT 2025/2026
