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41.
Uncovered interest parity is defined as:
42.
The international Fisher effect states that _____ rates are equal across
countries.
43.
The home currency approach:
44.
The home currency approach:
45.
The foreign currency approach to capital budgeting analysis:
I. is computationally easier to use than the home currency approach.
II. produces the same results as the home currency approach.
III. requires an exchange rate for each time period for which there is a cash
flow.
IV. computes the NPV of a project in both the foreign and the domestic
currency.
46.
Which one of the following is a suggested method of reducing a U.S.
importer's short-run exposure to exchange rate risk?
47.
Long-run exposure to exchange rate risk relates to:
48.
The type of exchange rate risk known as translation exposure is best
described as:
49.
Which of the following statements are correct?
I. The usage of forward rates increases the short-run exposure to exchange
rate risk.
II. Accounting translation gains and losses are recorded in the equity
section of the balance sheet.
III. The long-run exchange rate risk faced by an international firm can be
reduced if a firm borrows money in the foreign country where the firm has
operations.
IV. Unexpected changes in economic conditions are classified as short-run
exposure to exchange rate risk.
50.
Which one of the following types of operations would be subject to the most
political risk if the operation were conducted outside of a firm's home
country?
51.
How many Euros can you get for $2,200 if one euro is worth $1.2762?
52.
You are planning a trip to Australia. Your hotel will cost you A$145 per night
for seven nights. You expect to spend another A$2,800 for meals, tours,
souvenirs, and so forth. How much will this trip cost you in U.S. dollars
given the following exchange rates?
53.
You want to import $147,000 worth of rugs from India. How many rupees
will you need to pay for this purchase if one rupee is worth $0.0203?
54.
Currently, $1 will buy C$1.2103 while $1.2762 will buy €1. What is the
exchange rate between the Canadian dollar and the euro?
55.
Assume that ¥95.42 equal $1. Also assume that SKr7.7274 equal $1. How
many Japanese yen can you acquire in exchange for 3,000 Swedish krone?
56.
You just returned from some extensive traveling throughout the Americas.
You started your trip with $20,000 in your pocket. You spent 3.4 million
pesos while in Chile and 16,500 bolivares in Venezuela. Then on the way
home, you spent 47,500 pesos in Mexico. How many dollars did you have
left by the time you returned to the U.S. given the following exchange rates?
(Note: Multiple symbols are used to designate various currencies. For
example, the U.S. dollar is notated as "$" or as "USD".)
57.
You have 100 British pounds. A friend of yours is willing to exchange 180
Canadian dollars for your 100 British pounds. What will be your profit or loss
if you accept your friend's offer, given the following exchange rates?
58.
Assume you can buy 52 British pounds with 100 Canadian dollars. How
much profit can you earn on a triangle arbitrage given the following rates if
you start out with 100 U.S. dollars?
59.
Today, you can exchange $1 for £0.6522. Last week, £1 was worth $1.6104.
How much profit or loss would you now have if you had converted £100 into
dollars last week?
60.
Today, you can get either 121 Canadian dollars or 1,288 Mexican pesos for
100 U.S. dollars. Last year, 100 U.S. dollars was worth 115 Canadian dollars
or 1,291 Mexican pesos. Which one of the following statements is correct
given this information?
