Economics Course Overview Quiz

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Questions and Answers

What is the primary goal of the course?

To comprehend the functioning of exchange rates between currencies (correct)

To learn about stock trading strategies

To study historical financial crises

To understand domestic financial regulations

Which of the following statements about the final examination is true?

It includes both open questions and numerical exercises (correct)

It consists of multiple-choice questions only

It is an open-book exam

It is based solely on textbook readings

How are lecture slides made available to students?

Posted on the university's website only

Printed copies distributed in class

Shared through email each week

Uploaded weekly on Moodle (correct)

What is the scheduling pattern of the lectures?

Lectures are scheduled for both Tuesdays and Wednesdays Signup and view all the answers

Which book is NOT listed as part of the recommended bibliography?

Investment Strategies by Merton, R. Signup and view all the answers

Which of the following is true regarding the office hours for the course?

They can be scheduled by contacting the instructor via email Signup and view all the answers

What type of examination will students NOT encounter in this course?

Intermediate examination Signup and view all the answers

How will students be notified of variations in the course schedule?

They will be informed in advance Signup and view all the answers

What is the main inconvenience of a barter economy?

It lacks a commonly accepted medium of exchange. Signup and view all the answers

For money to function effectively, it must be stable in which aspect?

Purchasing power. Signup and view all the answers

Which of the following was one of the first types of money used in ancient civilizations?

Salt and cattle. Signup and view all the answers

What was the primary reason for the monopolization of coin issuance by local authorities?

To prevent counterfeit currency. Signup and view all the answers

What led to the transition from metal coins to paper banknotes around 1200?

The growth of international trade. Signup and view all the answers

What is one significant change in the production of banknotes that occurred by 1850?

Consolidation under central banks. Signup and view all the answers

What is the current form of money in the electronic age?

Records in a bank's electronic memory. Signup and view all the answers

What characteristic of money ensures ease of transport and storage?

Durability over time. Signup and view all the answers

What does the term 'currency' originate from?

A Latin verb meaning to run or flow Signup and view all the answers

Which of the following currencies is denoted by the symbol ¥?

JPY Signup and view all the answers

What is the origin of the name 'dollar'?

A German word related to a place where coins were minted Signup and view all the answers

What is the key distinction between ask price and bid price in currency exchange?

There is no distinction in principle Signup and view all the answers

What does the GBP symbol stand for?

Pound Signup and view all the answers

Which of the following reflects the connection of modern currencies to weight systems?

Dinar Signup and view all the answers

How can an exchange rate be expressed?

In either of the two currencies involved Signup and view all the answers

What is the primary confusion regarding exchange rates?

The concepts of ask and bid prices being the same Signup and view all the answers

What is the defined purpose of a currency?

A system of money used in a country. Signup and view all the answers

Which ISO code corresponds to the currency of Japan?

JPY Signup and view all the answers

What distinguishes domestic currency from foreign currency?

Domestic currency is used in the home country, foreign currency is not. Signup and view all the answers

Which country uses the currency known as the Hryvnia?

Ukraine Signup and view all the answers

What is the currency of Canada?

Canadian Dollar Signup and view all the answers

What ISO code represents the currency of Argentina?

ARS Signup and view all the answers

Which currency uses the symbol '€'?

Euro Signup and view all the answers

What type of organization established the ISO codes for currencies?

International Organization for Standardization Signup and view all the answers

Which of these is NOT a currency listed in the content?

Bahraini Dinar Signup and view all the answers

What is the currency of Norway?

Norwegian Krone Signup and view all the answers

Study Notes

Course Information

Course Title: International Financial Modelling
Lecturer: Cosimo Munari
Department: Department of Economics, University of Verona
Lecture Date: October 2, 2024 (Lecture 1)

Logistics

Office Location: Room 5, Floor 3, Viale Margherita 87, Vicenza
Email: [email protected]
Office Hours: Contact via email to schedule

Course Schedule

Tentative Schedule: Provided with specific dates and times for each lecture
Variations: Any changes will be announced in advance
Lecture 01: Wednesday, October 2nd, 11:00 AM - 1:30 PM
Lecture 13: Wednesday, November 27th, 11:00 AM - 1:30 PM
(Other lectures have specific days and times in the table)*

Lectures and Exam

Lectures: Audio-recorded and available on Moodle with slides uploaded weekly.
Final Exam: Closed-book exam covering open and numerical questions
Exam Content: Based on class lectures, slides, and discussed exercises.
No Intermediate Exam: There is no mid-term exam

Bibliography

Textbook Recommendations: A list of relevant books for further study:
- Benk, J., DeMarzo, P.: Corporate Finance, Pearson, 2011.
- Jacque, L.L.: International Corporate Finance, Wiley, 2020.
- Madura, J., Fox, R.: International Financial Management, Cencage, 2023.
- Sercu, P.: International Finance, Princeton University Press, 2009.
- Smithson, C.W.: Managing Financial Risk, McGraw-Hill, 1998.
Slides As Primary Source: The slides are sufficient for exam preparation

Course Goal

Exchange Rates: Understanding how exchange rates function
Currency Risk: Understanding how multinational companies are exposed to currency risk
Currency Risk Management: Learning how to manage currency risk for multinational companies

Money

Medium of Exchange: Money is anything used as a medium of exchange
Stability: Money's value should be stable to be useful
Transactions Volatility: The money supply shouldn't rise faster than the transaction volume
Portability: Easy to carry and store.

Money History

Ancient Money: Initially, commodities like salt or cattle were used.
Precious Metals: Later, precious metals like gold, silver, and bronze became more common.
Coinage: Coinage introduced in ancient Greece around 550 BC
Paper Money: International trade later necessitated paper banknotes as receipts for deposits, becoming true money, and central banking took over production by approximately 1850
Modern Money: Today money is primarily in electronic bank records.

Currencies

Definition: A currency is a system of money in a country.
Categories: Domestic and foreign currencies.
Identification: Currencies are identified by ISO codes
ISO Organization: International Organization for Standardization (ISO) is the body that created these codes.
Examples: Table listing many countries, their currencies, and ISO codes

Special Currency Symbols

Specific Symbols: EUR (€), USD ($), GBP (£), JPY (¥)

Currencies in History

Latin "currere": Word originated from the Latin word meaning "to flow."
Weight systems: Early currencies were connected to weight systems
Minting Authorities: Coin authorities were also responsible for stamping coins to maintain quality.
Joachimsthaler: Origin of the name "dollar," referring to the place where coins were minted.

Exchange Rates

Exchange Rate Definition: The relative price at which one currency is exchanged for another
Multiple Expressions Per Currency: Different ways to express exchange rates leading to confusion
Ask and Bid Prices: There exist distinct ask and bid prices for exchange rates, but transaction fees are commonly neglected for convenience during calculation.

Currency Exchange Office

Visual representation: A typical currency exchange office
Data from a Screen: Detail of a display from a currency exchange office with currency exchange rates provided in this table.

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Description

This quiz covers key aspects of the economics course, including course structure, examination details, and the evolution of money. Test your knowledge on course materials, scheduling, and the historical context of monetary systems.