Exam 19: International Corporate Finance

If the spot rate between the U.S. dollar and the Mexican peso is $1 = 12.9841 peso and the 3-month forward rate is $1 = 12.5698 pesos, is the forward peso selling at a discount or a premium?

Convert each of the following indirect quotes to dollar direct quotes: $1 = 4.01 Saudi Arabian riyal $1 = 62.05 Philippine peso $1 = 0.76 Latvian lat $1 equals:

A U.S. firm is expecting cash flows of 15 million Mexican pesos and 20 million Indian rupees. The current spot exchange rates are: $1 = 11.501 pesos and $1 = 45.525 rupees. If these cash flows are not received for one year and the expected spot rates at that time will be $1 = 11.265 pesos and $1 = 45.005 rupees, then what is the difference in dollars received that was caused by the delay?

A U.S. firm is expecting to pay cash flows of 20 million Egyptian pounds and 25 million Qatar rials. The current spot exchange rates are: $1 = 5.829 pounds and $1 = 3.645 rials. If these cash flows are delayed one year and the expected spot rates at that time will be $1 = 5.895 pounds and $1 = 3.899 rials, then what is the difference in dollars paid that was caused by the delay?

Convert the following indirect quote to a dollar direct quote: $1 = 3.8249 Saudi Arabian riyal

Given these two exchange rates, $1 = 14.96 Mexican peso and $1 = €0.67, compute the cross-rate between the Mexican peso and the euro. State this exchange rate in pesos.

Convert the following direct quote to a dollar indirect quote: 1 Malaysian ringget = $0.2875

If the price of silver in England is £6.85 per ounce, what is the expected price of silver in the United States if the spot exchange rate is $1 = £0.5426?

A U.S. firm is expecting cash flows of 20 million Mexican pesos and 35 million Indian rupees. The current spot exchange rates are: $1 = 11.792 pesos and $1 = 49.204 rupees. If these cash flows are not received for one year and the expected spot rates at that time will be $1 = 11.118 pesos and $1 = 41.075 rupees, then what is the difference in dollars received that was caused by the delay?

If you are told that $1 will buy 25 Korean wons, then you were given a(n):

Convert each of the following indirect quotes to dollar direct quotes: $1 = 118.115 Yen $1 = 0.9203 Euro $1 = 1.0052 Swiss franc $1 equals:

Convert each of the following indirect quotes to dollar direct quotes: $1 = 3.95 Saudi Arabian riyal $1 = 41.45 Philippine peso $1 = 0.58 Latvian lat $1 equals:

Which of these is defined as an exchange rate regime where the currency is completely determined by the foreign-exchange market through supply and demand?

Which of these is defined as an exchange rate regime where a currency's price is fixed to the value of another currency or to a basket of other currencies?

A U.S. firm is expecting to pay cash flows of 15 million Egyptian pounds and 25 million Qatar rials. The current spot exchange rates are: $1 = 5.25 pounds and $1 = 3.75 rials. If these cash flows are delayed one year and the expected spot rates at that time will be $1 = 5.62 pounds and $1 = 4.00 rials, then what is the difference in dollars paid that was caused by the delay?

Compute the amount of foreign currency that can be purchased for $750,000: 1 Israeli shekel = $0.2351

A financial manager has determined that the appropriate discount rate for a foreign project is 16 percent. However, that discount rate applies in the United States using dollars. What discount rate should be used in the foreign country using the foreign currency? The inflation rates in the United States and in the foreign country are expected to be 4 percent and 8 percent, respectively.

Tools that multinationals can use to help them reduce the risks inherent in making investments in foreign countries include:

If fewer dollars will buy a unit of foreign currency, then the foreign currency is:

If more dollars are required to buy a unit of foreign currency, then the dollar is: