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Fundamentals of Business Economics Questions and Answers

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Question 1

Which of the following describes a 'spot rate' in foreign currency dealing?

Options:

It is a short term rate that may change in the immediate future

It is the price for a currency that is to be delivered immediately

It is the exchange rate minus any commissions or transactions charges

It is the exchange rate minus the inflation rate

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Question 2

Futures are like forwards in that:

Options:

futures are a binding contract.

futures can be traded on future exchanges.

futures are standandised contracts for standardised amounts.

futures always cover the exact foreign currency exposure.

Question 3

A wireless phone manufacturer currently sells 2,000 units per quarter at a price of $400 The estimated price elasticity of demand is -2.5.

The manufacturer is considering an increase in the price to $440

What will this raise (+) or reduce (-) total revenue by? Give your answer in whole numbers.

Options:

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BA1 Exam Dumps : Fundamentals of Business Economics

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Fundamentals of Business Economics Questions and Answers

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