Week 1

1.
Question 1
Which one of the following statements regarding global supply chains in not true?

1 / 1 point

The three flows along a supply chain are physical goods (or services), information, and money.

Supply “chains” are in fact not linear chains but instead are complex networks.

Global supply chains have all the complexity of domestic supply chains but have many additional
international challenges to deal with.

Supply chains have been important in domestic trade but have had little impact so far with
international trade.

Correct
Correct – this statement is false! Global supply chains have been critical enablers of global trade
for many decades.

2.
Question 2
Global supply chains are all about the movement of physical goods and materials but have little
relevance for global services or information flows.

1 / 1 point

True

False

Correct
Correct! Global service and information supply chains exist just a surely as supply chains for
physical goods.

3.
Question 3
A global supply chain be designed to be highly efficient (meaning low cost) or highly responsive,
but not both.

1 / 1 point

True

False

Correct
Correct! The attributes of a highly efficient supply and the attributes of a highly responsive supply
chain are mutually exclusive. A company can sacrifice some efficiency for more responsiveness
or vice versa, but a supply chain cannot be both highly efficient and highly responsive at the
same time.

4.
Question 4
A global supply chain that has flexible facilities, inventory buffers, modular product designs, and
fast delivery is focusing on:

1 / 1 point

Responsiveness

Efficiency

Correct
Correct! This statement describes a responsive supply chain. In contrast, an efficient supply
chain would focus on standardized product designs, economies of scale, minimum inventory
levels, and low-cost transportation.

5.
Question 5
In the SCOR model, “Returns” are limited to defective products returned to a manufacturer by a
customer.

1 / 1 point

True

False

Correct
Correct! In addition to defective products, returns can occur for a variety of reasons including
overstock, recycling, return of shipping containers, and end-of-live returns.

6.
Question 6
A maker of electronics medical devices wants to outsource a components for one of its new
products. Labor costs are prohibitively high in its home country. The company want to have quick
turn-around times for orders and wants to be able to easily visit the supplier to discuss
component design changes and for troubleshooting. Which type of outsourcing would probably
be most appropriate for this situation?

1 / 1 point

Nearshoring

Reshoring

Farshoring

Onshoring

Correct
Correct! Nearshoring with a vendor in nearby countries will most likely provide quick order
turnaround times and easy visits.

7.
Question 7
A large company make smaller aircraft for regional airlines around the world. Several of the parts
used in its aircraft are specialized with long lead times and relatively few vendors but are of
standard industry design. The aircraft company does not have the expertise or capability to make
these parts in-house. What sourcing strategy would you recommend for this aircraft company?

1 / 1 point

Strategic sourcing

Critical parts sourcing

Volume sourcing
Routine sourcing

Correct
Correct! The part is not strategic since the are a common design in the industry but are critical to
have to produce company aircraft. The company should work to ensure sources of supply, keep
backup inventory, and encourage alternative suppliers.

8.
Question 8
When undertaking a sourcing cost analysis for a product, part, or service, which statement below
is most accurate?

0 / 1 point

Only include avoided costs for in-house production.

Factor in the hidden costs of outsourcing, even if subjective.

Include all costs incurred for outsourced production, not just the price quoted by the vendor.

All the other statements are correct.

9.
Question 9
When selecting a foreign supplier for outsourcing, the most import selection criteria should be
price. In other words, select the vendor with the lowest quoted price.

1 / 1 point

True

False

Correct
Price is an important consideration when selecting foreign suppliers for outsourcing, but many
other criteria must also be considered – such as quality, delivery times, proximity, language, and
financial stability, to name but a few.
Week 2

Module 2 Assessment — Global Logistics and Transportation

1.
Question 1

Generally speaking, the slower the speed to transport, the more expensive per tonne-kilometer.

1 / 1 point

True

False

Correct

 Slow shipping modes such as ships are much cheaper than fast aircraft, for instance.  

2.
Question 2

Which of the following shows the order of land transportation from most expensive to least
expensive?

1 / 1 point

Railroads – Trucks - Pipelines

Trucks – Railroads – Pipelines

Pipelines – Railroads – Trucks

Pipelines – Trucks – Railroads

Correct

Correct! Truck are more expensive than railroads are more expensive than pipelines
3.
Question 3

Which one of the following is not true regarding Maritime Transportation?

1 / 1 point

Ocean transport usually takes weeks to reach its destination

Maritime transport is not energy efficient relative transport modes

Maritime transport is highly dependent on geography and weather.

Maritime transport can carry almost any cargo

Correct

Correct, this statement is false. Maritime transport is the most energy efficient mode of
transportation on a tonne-kilometer basis.

4.
Question 4

Which one of the following is true for air transport?

1 / 1 point

Air transport is best suited for high value and perishable goods, and time-sensitive cargo.

Air cargo requires specially designed freight aircraft and cannot fly on passenger flights.

All parts of the world are well served by cargo aircraft.

Air cargo is among the least expensive modes of transport on a tonne-mile basis
Correct

Correct. This statement is true.

5.
Question 5

Which following statements regarding intermodal transportation is are true?  Mark all that are
true…

1 / 1 point

One downside of container shipping is that containers cannot carry frozen or refrigerated cargos.

Intermodal hubs can only handle shipments in containers

Modern container ships can carry thousand of containers in a single journey.

Correct

Correct!

Intermodal hubs handle the transfer of cargo from one mode of transportation to another, such as
ships to railroads, or trucks to aircraft.

Correct

Correct!

6.
Question 6

Greenhouse Gas (GH) emissions increase with the speed of a transportation mode.

1 / 1 point

True

False
Correct

Correct.  GHG emissions increase with the speed of a transport mode.  (Technically this make
sense.  The energy needed to move a solid object in water or air increases with the square or
cube of their speed.  So, if the object is propelled by a fossil fuel, GHG emissions will increase
with fuel use.)

WEEK 3

Module 3 Assessment — IB Foreign Exchange

1.
Question 1

Which one of the following is not an attribute of money?

1 / 1 point

Money is nothing more than the currency of each nation.

Medium of exchange

Unit of account since money is has consistent, divisible, and countable.

Inter-temporal value

Correct

Correct!  Currency is a national manifestation of money.  It is not an attribute of money.

2.
Question 2

Which one of the following statements about this exchange rate is true?  EUR/GBP = 0.89
1 / 1 point

One British Pound (GBP) will buy 0.89 Euros (EUR)

One Euro (EUR) will buy 0.89 British Pounds (GBP)

Correct

Correct!

3.
Question 3

Which one of the following is not a common type of foreign exchange exposure?

1 / 1 point

Translation exposure

Transaction exposure

Operating exposure

Confiscation exposure

Correct

Correct!  Currency confiscation is not a common type of forex risk.

4.
Question 4

Suppose you live in France and own a condo in Tunisia for vacations.  When you bought the
condo, you converted euros (EUR) to Tunisian dinar (TND) and purchased the condo for 100,000
TND.  At the time of your purchase, the dinar-euro exchange rate was TND/EUR = 0.40.  Now (a
few years later), you sell the condo for 100,000 TND (the same price you paid for it).  The dinar-
euro exchange rate is now TND/EUR = 0.30.  After you sell the condo, you exchange the
100,000 TND for Euros (EUR) to take home.  Which of the following statements is true?
1 / 1 point

Since TND has weakened against EUR, you will take home fewer euros than you paid.

Since TND has strengthen against EUR, you will take home more euros than you paid.

Since you sold the condo for the same price you paid for it in Tunisian dinar, you will take home
the same number of euros you originally paid.

Correct

Correct!  Since the dinar buys fewer euros than before, we say the dinar has weakened.  When
you exchange dinar back to euros, you will receive substantially fewer Euros than you paid.

5.
Question 5

You live in Australia and have booked a vacation in Hong Kong 6 months ahead.  The trip costs
10,000 HKD (Hong Kong dollars), payable in 3 months to the Hong Kong tour company.  At the
time of your booking the Australian dollar – Hong Kong dollar exchange rate was AUD/HKD =
5.0.  Three months later, you exchange Australian dollars for Hong Kong dollars at a rate of
AUD/HKD = 5.5 and pay the tour company 10,000 HKD as agreed.  Which of the following
statements is true regarding the cost of your trip in Australian dollars?

1 / 1 point

You pay fewer AUD for the trip than anticipated when you booked it.

You pay more AUD for the trip than anticipated when you booked it.

The cost of our trip in AUD does not change since the HKD price charged by the tour company
has not changed.

Correct

Correct!  Since the Australian dollar now buys more Hong Kong dollars than before (5.5 vs 5.0),
you need fewer AUD to pay for the trip.
6.
Question 6

You live in Cambodia and have a successful tour business showing European tourists the
wonders of Siem Reap.  Tourists convert their euros into Cambodian riel to pay for your
services.  Over the past six months, the euro-riel exchange rate has changed from EUR/KHR =
4,500 to EUR/KHR = 5,000, where it has stabilized.  How do you expect your business to
change?

1 / 1 point

I expect my business to increase since my services are now cheaper than before, when
translated into euros.

My business will not change because I still charge the same prices in riel as before.

I expect my business to decline since my services are now more expensive than before, when
translated into euros.

Correct

Correct!  A euro now buys more riels than before, so my services are cheaper, and therefore I
expect more business.  (Alternatively, I could raise my price in riels so that the euro price
remains the same!)

WEEK 4

1.
Question 1

Which one of the following statements regarding forex hedging is true?

1 / 1 point

The principal reason for forex hedging is to help businesses (and others) protect against foreign
exchange exposure (risk).

The principal reason for forex hedging is to make a profit directly from foreign exchange trading.

The principal reason for forex hedging is to provide a long-term financial investment without
much volatility.

Correct

Correct!  Most forex hedging activities are undertaken to protect against forex risks.

2.
Question 2

A company delays paying is customers because it expects a foreign currency to weaken.  This
type of hedging is called:

1 / 1 point

A marketing hedge strategy

An accounting hedge strategy

A production hedge strategy or “natural hedge”

Cash flow netting

A supply chain hedge strategy

3.
Question 3

A company moves its manufacturing and service operations to another country to reduce
currency exchange transactions.  This type of hedge is called:

1 / 1 point

Cash flow netting

A marketing hedge strategy

A supply chain hedge strategy

A production hedge strategy or “natural hedge

An accounting hedge strategy

Correct

4.
Question 4

A large multinational company reconciles foreign currency transactions between its many foreign
branches.  This type of hedge is called:

0 / 1 point

An accounting hedge strategy

A production hedge strategy or “natural hedge"

A marketing hedge strategy

A supply chain hedge strategy

5.
Question 5

A company wants to insure against foreign currency exchange losses, but does want to benefit
from currency exchange gains if there are any.  Which financial hedging strategy would be most
appropriate?

1 / 1 point

Futures contract – commodities exchanges

Forward contract – Forex OTC market

Options contract – Forex OTC and commodity exchanges

Swap contract – Forex OTC market

Correct

Correct!  Options are best for companies that want to insure against ruinous forex exchange
movements, but without locking into a fixed future exchange rate.

6.
Question 6

A company needs to borrow money in foreign currency, but wants to pay interest at its home
country rates. Which financial hedging strategy would be most appropriate?

1 / 1 point

Options contract – Forex OTC and commodity exchanges

Swap contract – Forex OTC market

Futures contract – commodities exchanges

Correct

Correct! Swaps are best for companies that need to borrow money in a foreign currency, but
want to pay home country interest rates.

7.
Question 7

A large multinational company needs to lock in a currency exchange rate for a large foreign
project. The amount of money is large, and the terms of the project are complex.  Which financial
hedging strategy would be most appropriate?

1 / 1 point

Futures contract – commodities exchanges

Options contract – Forex OTC and commodity exchanges

Swap contract – Forex OTC market

Forward contract – Forex OTC market

Correct

Correct! Forward contracts are best suited for large companies the need custom contract terms
and need to lock in exchange rates for large sums of money

8.
Question 8
A medium-sized exporter wants to quickly lock in an exchange rate with known terms and
pricing, and without negotiation.

1 / 1 point

Options contract – Forex OTC and commodity exchanges

Swap contract – Forex OTC market

Futures contract – commodities exchanges

Forward contract – Forex OTC market

Correct

Correct!  Futures are best suited for companies that want standard pricing and terms, for
immediate execution without negotiation.

WEEK 5
1.
Question 1

Which one of the following statements regarding global supply chains is not true?
1 / 1 point

Global supply chains have all the complexity of domestic supply chains but have many additional
international challenges to deal with.

Supply chains have been important in domestic trade but have had little impact so far with
international trade.

Supply “chains” are in fact not linear chains but instead are complex networks.

The three flows along a supply chain are physical goods (or services), information, and money.

Correct

Correct – this statement is false!  Global supply chains have been critical enablers of global trade
for many decades.

2.
Question 2

Global supply chains are all about the movement of physical goods and materials but have little
relevance for global services or information flows.

1 / 1 point

True

False

Correct

Correct!  Global service and information supply chains exist just as surely as supply chains for
physical goods.

3.
Question 3
A global supply chain can be designed to be highly efficient (meaning low cost) or highly
responsive, but not both.

1 / 1 point

True

False

Correct

Correct!  The attributes of a highly efficient supply and the attributes of a highly responsive
supply chain are mutually exclusive.  A company can sacrifice some efficiency for more
responsiveness or vice versa, but a supply chain cannot be both highly efficient and highly
responsive at the same time.

4.
Question 4

A global supply chain that has flexible facilities, inventory buffers, modular product designs, and
fast delivery is focusing on:

1 / 1 point

Efficiency

Responsiveness

Correct

Correct!  This statement describes a responsive supply chain.  In contrast, an efficient supply
chain would focus on standardized product designs, economies of scale, minimum inventory
levels, and low-cost transportation.

5.
Question 5

In the SCOR model, “Returns” are limited to defective products returned to a manufacturer by a
customer.

1 / 1 point
True

False

Correct

Correct!  In addition to defective products, returns can occur for a variety of reasons including
overstock, recycling, return of shipping containers, and end-of-live returns.

6.
Question 6

A large company makes smaller aircraft for regional airlines around the world.  Several of the
parts used in its aircraft are specialized with long lead times and relatively few vendors but are of
standard industry design.  The aircraft company does not have the expertise or capability to
make these parts in-house. What sourcing strategy would you recommend for this aircraft
company?

1 / 1 point

Critical parts sourcing

Routine sourcing

Volume sourcing

Strategic sourcing

Correct

Correct!  The part is not strategic since they are a common design in the industry but are critical
to have to produce company aircraft.  The company should work to ensure sources of supply,
keep backup inventory, and encourage alternative suppliers.

7.
Question 7
A maker of electronic medical devices wants to outsource components for one of its new
products.  Labor costs are prohibitively high in its home country.  The company wants to have
quick turn-around times for orders and wants to easily visit the supplier to discuss component
design changes and for troubleshooting.  Which type of outsourcing would probably be most
appropriate for this situation?

1 / 1 point

Farshoring

Nearshoring

Reshoring

Onshoring

Correct

Correct!  Nearshoring with a vendor in nearby countries will most likely provide quick order
turnaround times and easy visits.

8.
Question 8

When undertaking a sourcing cost analysis for a product, part, or service, which statement below
is most accurate?

1 / 1 point

Include all costs incurred for outsourced production, not just the price quoted by the vendor.

Factor in the hidden costs of outsourcing, even if subjective.

Only include avoided costs for in-house production.

Correct

Correct!  All the other statements are correct.

9.
Question 9

When selecting a foreign supplier for outsourcing, the most import selection criteria should be
price.  In other words, select the vendor with the lowest quoted price.

1 / 1 point

True

False

Correct

Price is an important consideration when selecting foreign suppliers for outsourcing, but many
other criteria must also be considered – such as quality, delivery times, proximity, language, and
financial stability, to name but a few.

10.
Question 10

Which one of the following is not one of the 6 “Rights” of international logistics?

1 / 1 point

On the right route

The right goods

In the right condition

At the right time

In the right quantities

For the right cost

Correct

Correct! – the “right route” is not one of the 6 logistics “Rights”

11.
Question 11

Which one of the following is not specified by an Incoterm?

1 / 1 point

Cost of the product

Insurance costs

Export and import formalities 

Point of delivery

Transportation costs

Correct

Correct! – Incoterms do not specify the cost of a product or shipment

12.
Question 12

Which one of the descriptions below best describes a 3PL logistics service provider?
1 / 1 point

Provides high level strategic decisions such as selecting multiple intermediaries for all logistics
activities of a firm

Provides systems-oriented logistics consulting and management services

Provides integrated and customized logistics services such as transportation and warehousing

Provides narrow, specialized logistics services

Correct

Correct! – this accurately describes the services of a 3PL logistics intermediary

13.
Question 13

Which of the following will be likely outcomes of logistics digitalization?  Select the one best
answer below.

1 / 1 point

Indelible and irrefutable records of logistics transactions

Real-time identification, location, and transit tracking of logistics assets

All of these are expected outcomes of logistics digitalization

Improved logistics responsiveness and efficiency

Reduced logistics paperwork

Correct! All of these are expected outcomes of logistics digitalization

14.
Question 14

Generally speaking, the slower the speed to transport, the more expensive per tonne-kilometer.

1 / 1 point

True

False

Correct

Correct.  Slow shipping modes such as ships are much cheaper than fast aircraft, for instance.

15.
Question 15

Which of the following shows the order of land transportation from most expensive to least
expensive?

1 / 1 point

Railroads – Trucks - Pipelines

Pipelines – Railroads – Trucks

Trucks – Railroads – Pipelines 

Pipelines – Trucks – Railroads

Correct

Correct!  Truck are more expensive than railroads are more expensive than pipelines
16.
Question 16

Which one of the following is not true regarding Maritime Transportation?

1 / 1 point

Maritime transport is not energy efficient relative transport modes

Maritime transport is highly dependent on geography and weather.

Ocean transport usually takes weeks to reach its destination

Maritime transport can carry almost any cargo

Correct

Correct, this statement is false.  Maritime transport is the most energy efficient mode of
transportation on a tonne-kilometer basis. 

17.
Question 17

Which one of the following is true for air transport?

1 / 1 point

Air transport is best suited for high value and perishable goods, and time-sensitive cargo.

Air cargo is among the least expensive modes of transport on a tonne-mile basis

All parts of the world are well served by cargo aircraft.

Air cargo requires specially designed freight aircraft and cannot fly on passenger flights.
Correct

Correct. This statement is true.

18.
Question 18

Which following statements regarding intermodal transportation are true?  Mark all that are true...

1 / 1 point

Intermodal hubs handle the transfer of cargo from one mode of transportation to another, such as
ships to railroads, or trucks to aircraft.

Correct

Correct!

One downside of container shipping is that containers cannot carry frozen or refrigerated cargos.

Modern container ships can carry thousands of containers in a single journey.

Correct

Correct!

Intermodal hubs can only handle shipments in containers

19.
Question 19

Greenhouse Gas (GHG) emissions are roughly proportional to the cost of a transportation mode
measured in cost per tonne-kilometer.

0 / 1 point

True

False
20.
Question 20

Which one of the following is not an attribute of money?

1 / 1 point

Money is nothing more than the currency of each nation.

Medium of exchange

Unit of account since money is consistent, divisible, and countable.

Inter-temporal value

Correct

Correct!  Currency is a national manifestation of money.  It is not an attribute of money.

21.
Question 21

Which one of the following statements about this exchange rate is true?  EUR/GBP = 0.89

1 / 1 point

One British Pound (GBP) will buy 0.89 Euros (EUR)

One Euro (EUR) will buy 0.89 British Pounds (GBP)

Correct

Correct!

22.
Question 22

Which one of the following is not a common type of foreign exchange exposure?
1 / 1 point

Transaction exposure

Confiscation exposure

Operating exposure

Translation exposure

Correct

Correct!  Currency confiscation is not a common type of forex risk.

23.
Question 23

Suppose you live in France and own a condo in Tunisia for vacations.  When you bought the
condo, you converted euros (EUR) to Tunisian dinar (TND) and purchased the condo for 100,000
TND.  At the time of your purchase, the dinar-euro exchange rate was TND/EUR = 0.40.  Now (a
few years later), you sell the condo for 100,000 TND (the same price you paid for it).  The dinar-
euro exchange rate is now TND/EUR = 0.30.  After you sell the condo, you exchange the
100,000 TND for Euros (EUR) to take home.  Which of the following statements is true?

1 / 1 point

Since TND has strengthened against EUR, you will take home more euros than you paid.

Since TND has weakened against EUR, you will take home fewer euros than you paid.

Since you sold the condo for the same price you paid for it in Tunisian dinar, you will take home
the same number of euros you originally paid.

Correct
Correct!  Since the dinar buys fewer euros than before, we say the dinar has weakened.  When
you exchange dinar back to euros, you will receive substantially fewer Euros than you paid.

24.
Question 24

You live in Australia and have booked a vacation in Hong Kong 6 months ahead.  The trip costs
10,000 HKD (Hong Kong dollars), payable in 3 months to the Hong Kong tour company.  At the
time of your booking the Australian dollar – Hong Kong dollar exchange rate was AUD/HKD =
5.0.  Three months later, you exchange Australian dollars for Hong Kong dollars at a rate of
AUD/HKD = 5.5 and pay the tour company 10,000 HKD as agreed.  Which of the following
statements is true regarding the cost of your trip in Australian dollars?

1 / 1 point

The cost of our trip in AUD does not change since the HKD price charged by the tour company
has not changed.

You pay more AUD for the trip than anticipated when you booked it.

You pay fewer AUD for the trip than anticipated when you booked it.

Correct

Correct!  Since the Australian dollar now buys more Hong Kong dollars than before (5.5 vs 5.0),
you need fewer AUD to pay for the trip.

25.
Question 25

You live in Cambodia and have a successful tour business showing European tourists the
wonders of Siem Reap.  Tourists convert their euros into Cambodian riel to pay for your
services.  Over the past six months, the euro-riel exchange rate has changed from EUR/KHR =
4,500 to EUR/KHR = 5,000, where it has stabilized.  How do you expect your business to
change?

1 / 1 point

I expect my business to decline since my services are now more expensive than before, when
translated into euros.
My business will not change because I still charge the same prices in riel as before.

I expect my business to increase since my services are now cheaper than before, when
translated into euros.

Correct

Correct!  A euro now buys more riels than before, so my services are cheaper, and therefore I
expect more business.  (Alternatively, I could raise my price in riels so that the euro price
remains the same!)

26.
Question 26

Which one of the following statements regarding forex hedging is true?

1 / 1 point

The principal reason for forex hedging is to make a profit directly from foreign exchange trading.

The principal reason for forex hedging is to help businesses (and others) protect against foreign
exchange exposure (risk).

The principal reason for forex hedging is to provide a long-term financial investment without
much volatility.

Correct

Correct!  Most forex hedging activities are undertaken to protect against forex risks.

27.
Question 27

A company delays paying is customers because it expects a foreign currency to weaken.  This
type of hedging is called:

1 / 1 point
Cash flow netting

A marketing hedge strategy

A production hedge strategy or “natural hedge”

A supply chain hedge strategy

An accounting hedge strategy

Correct

28.
Question 28

A company moves its manufacturing and service operations to another country to reduce
currency exchange transactions.  This type of hedge is called:

0 / 1 point

Cash flow netting

An accounting hedge strategy

A marketing hedge strategy

A supply chain hedge strategy

A production hedge strategy or “natural hedge"

29.
Question 29
A large multinational company reconciles foreign currency transactions between its many foreign
branches to reduce forex expenses.  This is called:

1 / 1 point

Cash flow netting

An accounting hedge strategy

A marketing hedge strategy

A supply chain hedge strategy

A production hedge strategy or “natural hedge"

Correct

30.
Question 30

A company wants to insure against foreign currency exchange losses, but does want to benefit
from currency exchange gains if there are any.  Which financial hedging strategy would be most
appropriate?

1 / 1 point

Forward contract – Forex OTC market

Futures contract – commodities exchanges

Swap contract – Forex OTC market

Correct

Correct!  Options are best for companies that want to insure against ruinous forex exchange
movements, but without locking into a fixed future exchange rate.

31.
Question 31

A company needs to borrow money in foreign currency, but wants to pay interest at its home
country rates. Which financial hedging strategy would be most appropriate?

1 / 1 point

Swap contract – Forex OTC market

Options contract – Forex OTC and commodity exchanges

Forward contract – Forex OTC market

Futures contract – commodities exchanges

Correct

Correct! Swaps are best for companies that need to borrow money in a foreign currency, but
want to pay home country interest rates.

32.
Question 32

A large multinational company needs to lock in a currency exchange rate for a large foreign
project. The amount of money is large, and the terms of the project are complex.  Which financial
hedging strategy would be most appropriate?

1 / 1 point

Futures contract – commodities exchanges

Options contract – Forex OTC and commodity exchanges

Swap contract – Forex OTC market

Correct

Correct! Forward contracts are best suited for large companies the need custom contract terms
and need to lock in exchange rates for large sums of money.

33.
Question 33

A medium-sized exporter wants to quickly lock in an exchange rate with known terms and
pricing, and without negotiation.

1 / 1 point

Futures contract – commodities exchanges

Options contract – Forex OTC and commodity exchanges

Swap contract – Forex OTC market

Forward contract – Forex OTC market

Correct

Correct!  Futures are best suited for companies that want standard pricing and terms, for
immediate execution without negotiation. 

34.
Question 34

Which type of forex market is most appropriate for large companies in need of large forex
forward contracts with flexible terms?
1 / 1 point

The global Forex OTC market

Commodity forex exchange markets

Correct

Correct!  The Forex OTC market is most appropriate for large firms in need of large forex forward
contracts with flexible terms.

35.
Question 35

Which one of the following is not a characteristic of the global Forex OTC market?

1 / 1 point

Largest single market in the world

Decentralized without a single center of operations

Highly regulated

Trading is open 24 a day for five days a week

Trillions of dollars (USD equivalent) are traded every day.

Correct

Correct!  The Forex OTC market is largely self-regulating, although many countries have national
regulations regarding forex trading in those countries. 

36.
Question 36

Which one of the following is not a characteristic of forex trading on a commodity exchange?
1 / 1 point

Standardized terms, delivery dates, and contract values.

Centralized marketplaces

Real time transparent pricing 

Contracts are negotiated bilateral agreements

Trade currency futures and options only

Correct

Correct!  Forex commodity contracts are not negotiated bilateral agreements, but are
standardized contracts with the commodity exchange as the counterparty.