1. Which of the following statements about forward exchange rates is false?

a)They reduce uncertainty about future value of currencies.B)They reflect expectations about the future value of currencies.C)They are usually slightly lower than the spot rate.D) Interest rate parity theory explains forward exchange rates.

2.

If in 2012, the Canadian dollar's exchange rate with the Sudanese dinar was .0069 dollars per dinar and in 2015, the exchange rate was .0062 dollars per dinar, it would indicate that in the period from 2012 to 2015, the dollar: A)strengthened against the dinar. B)weakened against the dinar. C)was unrelated to the value of the dinar. Dthe answer cannot be determined without knowing the number of dinars needed to buy a dollar.

3. A particular country's pattern of exporting more than is being imported is likely to: Ahave no effect on that country's currency. B)depress other countries' currencies. C)decrease the value of that country's currency. D)stabilize the relative purchasing power between countries. 4.The CPA Canada Handbook recommends when a foreign operation is designated as integrated: A)it causes instability in the currencies in international money and foreign exchange markets. B)the market value of assets and liabilities denominated in foreign currencies is subject to change. C)it exploits local labour with low wages. D) its transactions be captured as if they had been performed by the parent company.

5.Which of the following is a reason for Canadian firms to operate in foreign markets?

A)More expensive labour B)Reduce international diversification C)Tax rate increases D)Increased savings of production costs