On October 19, 1987 (Black Monday), stock prices in Hong Kong began collapsing and spread throughout the day into Europe and then North America. This is an example of contagion.

True

False

Buying a currency in a currency futures contract and profiting on an increase in the value of the currency over time is called

hedging.

syndicating.

a short position.

a long position.

The impact of random change in the value of one currency with respect to other currencies is called the

transaction risk.

exchange rate risk.

economic risk.

consolidated risk.

A simple agreement wherein the exporter sends an invoice with the goods and the exporter pays upon the receipt is called a(n)

open account.

commercial letter of credit.

bankers acceptance.

participation loan.