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FundamentalsofMultinationalFinance ,3e(Moffett) Chapter8 1 Foreign Currency Derivatives 8.1 Mul 1) Financial derivativesarepowerfultoolsthatcanbeusedbymanagementforpurposesof A) speculation. B) hedging. C) humanresource management. D) AandBabove. Answer: D Topic: Financial Derivatives Skill: Recognition 2) Aforeign currency ________contractcallsforthefuturedeliveryofastandardamountofforeignexchangeatafixedtime, place,andprice. A) futures B) forward C) option D) swap Answer: A Topic: FuturesContract Skill: Recognition 3) Currency futurescontractshavebecomestandardfareandtradereadilyintheworldmoneycenters. Answer: TRUE Topic: FuturesContract Skill: Recognition 4) Themajor difference between currencyfuturesandforwardcontractsisthatfuturescontractsarestandardizedforeaseoftradingonan exchangemarketwhereasforwardcontractsarespecializedandtailoredtomeettheneedsofclients. Answer: TRUE Topic: FuturesContract Skill: Recognition 5) Whichof thefollowingisNOTacontractspecificationforcurrencyfuturestradingonanorganizedexchange? A) sizeofthe contract B) maturitydate C) lasttradingday D) Alloftheabove arespecified. Answer: D Topic: FuturesContract Skill: Recognition 6) About ________ ofallfuturescontractsaresettledbyphysicaldeliveryofforeignexchangebetweenbuyerandseller. A) 0% B) 5% C) 50% D) 95% Answer: B Topic: FuturesContract Skill: Analytical 7) Futures contractsrequirethatthepurchaserdepositaninitialsumascollateral.Thisdepositiscalleda A) collateralized deposit. B) markedmarket sum. C) margin. D)... View Full Document

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