True & False Question

1. For multinational firms, political risks exist in various forms from country to country, and they must be addressed explicitly in any financial analysis.

2. The international monetary system is the framework within which exchange rates are determined and it is the blueprint for international trade and capital flows.

3. An exchange rate is the price of one country's currency in terms of another country's currency.

4. Suppose that 1 euro has changed from $1.25 to $1.20. This means that US$ has depreciated against euro.

5. Forward exchange rate is an agreed-upon price at which two currencies will be exchanged at some future date.