exam #3 key - Exam #3 Management 328 November 21, 2007 _...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Exam #3 ____________________ Management 328 name November 21, 2007 This document offers insight into the range of acceptable answers. Answer 10 of 12 questions. Each question is worth 10 points. 1. Identify and briefly describe three barriers to free trade. Explain how they inhibit trade and who benefits from their imposition. See exam #1 key for answer 2. There are several types of integration to which nations can belong. Identify these in order of increasing integration and suggest what each unit’s dominant advantage is over its less integrated predecessor. See exam #2 key for answer
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
3. Describe the difference between transaction exposure and translation exposure in the context of foreign currency risk. Translation exposure is realized and reported on the income statement. Translation exposure in not realized and is reported as a footnote to the balance sheet. Both help identify the consequence of foreign exchange fluctuations. These consequences can be favorable or unfavorable depending on the exposure a firm has and the direction of the foreign currency movement. Additional responses also earned credit. 4. Explain how forward exchange rates are influenced by the forces of interest rate parity. In theory interest rate parity explains the spreads in the forward market.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/10/2008 for the course INTERNATIO 328 taught by Professor Crespy during the Spring '08 term at New Mexico.

Page1 / 6

exam #3 key - Exam #3 Management 328 November 21, 2007 _...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online