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Questions and Answers
What is the term used to describe a decline in a currency's value?
What is the term used to describe a decline in a currency's value?
- Appreciation
- Depreciation (correct)
- Devaluation
- Revaluation
How are spot rates at two specific points in time denoted?
How are spot rates at two specific points in time denoted?
- A and B
- R and T
- S and St-1 (correct)
- X and Y
How do exchange rate movements affect an MNC's value in terms of cash inflows and outflows?
How do exchange rate movements affect an MNC's value in terms of cash inflows and outflows?
- They only affect the amount of cash outflows needed to pay for imports.
- They only affect the amount of cash inflows received from exporting.
- They do not affect cash inflows or outflows.
- They can affect the amount of cash inflows received from exporting or from a subsidiary and the amount of cash outflows needed to pay for imports. (correct)
What does an increase in a currency's value relative to another currency refer to?
What does an increase in a currency's value relative to another currency refer to?
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What is the term used to describe an increase in the value of one currency in units of another currency?
What is the term used to describe an increase in the value of one currency in units of another currency?
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