Foreign Currency Transactions Flashcards
1
Q
the times when the value of foreign currency must be revalued
A
- transaction date
- reporting date
- settlement date
2
Q
causes of foreign exchange risk
A
- inflation
- economic performance
- interest rate fluctuations
- political stability
- speculations
3
Q
Direct method
A
1 EU = 0.19 CAD
4
Q
Indirect method
A
1 CAD = 3.45 EU
5
Q
Spot rate
A
the rate to exchange currency today
6
Q
forward exchange contract
A
the agreement between a bank and a customer to exchange currencies on a specified future date at a specified rate
7
Q
forward rate
A
the rate agreed to today for exchanging currency at a future date
8
Q
A
