The Foreign Exchange Market in Global Business Today
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Questions and Answers

What is the great promise of exporting according to the text?

  • Opportunities for fast global expansion
  • Reduced operational costs through exporting
  • Large revenue and profit opportunities in foreign markets (correct)
  • Access to unique technology in foreign markets

    • How can exporting enable a firm to achieve economies of scale?

  • By expanding the firm's domestic market share
  • By lowering its unit costs (correct)
  • By increasing unit costs
  • By reducing competition in foreign markets

    • What are some of the difficulties exporters often face?

  • High demand in foreign markets
  • Minimal delays and errors in the export process
  • Voluminous paperwork and complex formalities (correct)
  • Low competition in the export market

    • Why do firms that do not export often lose out on significant opportunities according to the text?

    <p>Due to over-reliance on domestic markets only</p> Signup and view all the answers

    What is one potential benefit of exporting highlighted in the text?

    <p>Growth opportunities from international markets</p> Signup and view all the answers

    How can exporting help in increasing the revenue and profit base of a company?

    <p>By tapping into a larger international market</p> Signup and view all the answers

    What is one of the learning objectives of Chapter 9 regarding the foreign exchange market?

    <p>Explaining different theories about currency exchange rates</p> Signup and view all the answers

    During what period did the yuan experience significant fluctuations against the U.S. dollar according to the text?

    <p>Between 2015 and early 2018</p> Signup and view all the answers

    What specific lesson did Chinese businesses learn due to the fluctuating value of the yuan?

    <p>Foreign exchange risk</p> Signup and view all the answers

    Which exposure type is mentioned in Chapter 1 Slide 2 as a key concept relating to foreign exchange markets?

    <p>Economic exposure</p> Signup and view all the answers

    What is one key topic covered in Chapter 9 regarding currency exchange rates?

    <p>Different theories explaining rate determination</p> Signup and view all the answers

    What is a common factor causing fluctuations in currency values?

    <p>Economic slowdown</p> Signup and view all the answers

    What percentage of the final value of goods exported is typically spent on preparing documentation?

    <p>10 percent</p> Signup and view all the answers

    Which of the following is NOT a common problem faced in export transactions?

    <p>Smooth financing process</p> Signup and view all the answers

    Which country has a well-developed institutional structure for international trade like Japan and Germany?

    <p>Japan</p> Signup and view all the answers

    What type of information sources are Canadian companies increasingly using to be aware of international business opportunities?

    <p>Government agencies</p> Signup and view all the answers

    How many parties are typically involved in a typical export transaction?

    <p>30 parties</p> Signup and view all the answers

    In an export transaction, how many original documents are often involved?

    <p>60 original documents</p> Signup and view all the answers

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