QUESTION 16

1. Montana Banks bid price for Canadian dollars is $.7939 and its ask price is $.82. What is the bid/ask percentage spread?

A. 2.0%

B. 2.61%

C. 3.18%

D. 3.29%

1. The overall sensitivity of a firms cash flows to exchange rate movements is referred to as _____ _____, which is a broader concept than transaction exposure.

trading exposure

translation exposure

economic exposure

unintentional exposure

QUESTION 18

1. The theory of _______ ________ implies that countries should specialize in production, thereby relying on other countries for some products. Consequently, there is a need for international business.