Question 1

Which of these is a company that operates production and/or sales facilities in multiple countries?

Accepted Answer

A)  World trade corporation 
B)  Multinational corporation 
C)  Free trade corporation 
D)  Managed-floating corporation 
A)  World trade corporation 
B)  Multinational corporation 
C)  Free trade corporation 
D)  Managed-floating corporation

Question 2

Compute the number of dollars that can be bought with 2 million of foreign currency units: $1 = 15,990 Vietnam dong

Accepted Answer

A)  $125.0782 
B)  $3,198.00 
C)  $12,507.82 
D)  $198.7577 
A)  $125.0782 
B)  $3,198.00 
C)  $12,507.82 
D)  $198.7577

Question 3

An international organization that monitors exchange rates and balance of payments and oversees the global financial system is the ________.

Accepted Answer

A)  World Trade Organization (WTO) 
B)  International Monetary Fund (IMF) 
C)  European Union (EU) 
D)  North American Free Trade Agreement (NAFT
A)  
A)  World Trade Organization (WTO) 
B)  International Monetary Fund (IMF) 
C)  European Union (EU) 
D)  North American Free Trade Agreement (NAFT
A)

Question 4

Which of these is defined as a contractual agreement that states the exchange rate to be used at a future exchange date?

Accepted Answer

A)  Fixed peg rate 
B)  Forward exchange rate 
C)  Managed exchange rate 
D)  Future strategy rate 
A)  Fixed peg rate 
B)  Forward exchange rate 
C)  Managed exchange rate 
D)  Future strategy rate

Question 5

Convert the following indirect quote to a dollar direct quote: $1 = 2,150.4 Venezuelan bolivar

Accepted Answer

A)  $0.00046503 
B)  $4.65 
C)  $1.465 
D)  $2.1504 
A)  $0.00046503 
B)  $4.65 
C)  $1.465 
D)  $2.1504

Question 6

Compute the amount of foreign currency that can be purchased for $600,000: 1 Korean won = $0.001045

Accepted Answer

A)  627,000 won 
B)  627 won 
C)  5,741,640 won 
D)  574,162,679.4 won 
A)  627,000 won 
B)  627 won 
C)  5,741,640 won 
D)  574,162,679.4 won

Question 7

Compute the number of dollars that can be bought with 5 million of foreign currency units: $1 = 2,150.4 Venezuelan bolivar

Accepted Answer

A)  $2,325.1488 
B)  $232,514.88 
C)  $7,325,000 
D)  $43,008,000.00 
A)  $2,325.1488 
B)  $232,514.88 
C)  $7,325,000 
D)  $43,008,000.00

Question 8

Convert each of the following direct quotes to dollar indirect quotes:
1 Korean won = $0.001556
1 Malaysian ringgit = $0.3419
1 Thai baht = $0.03999
$1 equals:

Accepted Answer

A)  642.67 won; 2.9248 ringget; 28.01 baht 
B)  662.67 won; 2.9248 ringget; 28.01 baht 
C)  642.67 won; 2.7408 ringget; 25.01 baht 
D)  642.67 won; 2.9248 ringget; 25.01 baht 
A)  642.67 won; 2.9248 ringget; 28.01 baht 
B)  662.67 won; 2.9248 ringget; 28.01 baht 
C)  642.67 won; 2.7408 ringget; 25.01 baht 
D)  642.67 won; 2.9248 ringget; 25.01 baht

Question 9

If the spot rate between the U.S. dollar and the Brazilian real is $1 = 2.0895 real and the 3-month forward rate is $1 = 2.1725 real, is the forward real selling at a discount or a premium?

Accepted Answer

A)  Discount 
B)  Premium 
C)  Unable to determine with the cross-rates 
A)  Discount 
B)  Premium 
C)  Unable to determine with the cross-rates

Question 10

Which of the following is the theory relating the expected adjustment needed in the future spot exchange rate between countries to the inflation rate in each country?

Accepted Answer

A)  Purchasing power parity 
B)  Interest rate parity 
C)  Law of one price 
D)  Currency swap parity 
A)  Purchasing power parity 
B)  Interest rate parity 
C)  Law of one price 
D)  Currency swap parity

Question 11

If the current spot rate between the U.S. dollar and the Netherland Antilles guilder was $1 = 1.68 guilder, and if the inflation rate in the United States was 1 percent and in the Netherland Antilles it was 6 percent, then what would be the expected spot rate in one year?

Accepted Answer

A)  $0.5952 
B)  $0.5654 
C)  $0.6250 
D)  $0.6571 
A)  $0.5952 
B)  $0.5654 
C)  $0.6250 
D)  $0.6571

Question 12

Compute the amount of foreign currency that can be purchased for $200,000: 1 Danish krone = $0.1755

Accepted Answer

A)  200,000 krone 
B)  11,396 krone 
C)  35,100 krone 
D)  1,139,601.14 krone 
A)  200,000 krone 
B)  11,396 krone 
C)  35,100 krone 
D)  1,139,601.14 krone

Question 13

Which of these is an international organization that deals with international trade rules and helps settle disputes between its member governments?

Accepted Answer

A)  World Trade Union 
B)  World Free Trade Agreement 
C)  International Monetary Fund 
D)  World Trade Organization 
A)  World Trade Union 
B)  World Free Trade Agreement 
C)  International Monetary Fund 
D)  World Trade Organization

Question 14

If the spot rate between the U.S. dollar and the Mexican peso is $1 = 2.45 peso and the 3-month forward rate is $1 = 2.05 pesos, is the forward peso selling at a discount or a premium?

Accepted Answer

A)  Discount 
B)  Premium 
C)  Unable to determine with the cross-rates 
A)  Discount 
B)  Premium 
C)  Unable to determine with the cross-rates

Question 15

All of the following are political risks to the assets and cash flows of multinational corporations EXCEPT:

Accepted Answer

A)  government seizure of a company's assets in the country. 
B)  enactment of new taxation. 
C)  expropriation with minimal compensation. 
D)  improving exchange rates to stimulate foreign investment. 
A)  government seizure of a company's assets in the country. 
B)  enactment of new taxation. 
C)  expropriation with minimal compensation. 
D)  improving exchange rates to stimulate foreign investment.

Question 16

China's exchange rate is a:

Accepted Answer

A)  freely floating regime. 
B)  managed floating regime. 
C)  fixed peg arrangement. 
D)  none of the options. 
A)  freely floating regime. 
B)  managed floating regime. 
C)  fixed peg arrangement. 
D)  none of the options.

Question 17

If the spot rate between the U.S. dollar and the Brazilian real is $1 = 2.5698 real and the 3-month forward rate is $1 = 2.9841 real, is the forward real selling at a discount or a premium?

Accepted Answer

A)  Discount 
B)  Premium 
C)  Unable to determine with the cross-rates 
A)  Discount 
B)  Premium 
C)  Unable to determine with the cross-rates

Question 18

Convert each of the following indirect quotes to dollar direct quotes:
$1 = 3.05 Saudi Arabian riyal
$1 = 41.45 Philippine peso
$1 = 0.52 Latvian lat
$1 equals:

Accepted Answer

A)  0.33 riyal; 0.02 peso; 1.92 lat 
B)  0.33 riyal; 0.02 peso; 1.95 lat 
C)  0.38 riyal; 0.05 peso; 1.92 lat 
D)  0.38 riyal; 0.02 peso; 1.95 lat 
A)  0.33 riyal; 0.02 peso; 1.92 lat 
B)  0.33 riyal; 0.02 peso; 1.95 lat 
C)  0.38 riyal; 0.05 peso; 1.92 lat 
D)  0.38 riyal; 0.02 peso; 1.95 lat

Question 19

Convert the following direct quote to a dollar indirect quote: 1 Danish krone = $0.1755

Accepted Answer

A)  0.1755 krone 
B)  0.8245 krone 
C)  1.1755 krone 
D)  5.698 krone 
A)  0.1755 krone 
B)  0.8245 krone 
C)  1.1755 krone 
D)  5.698 krone

Question 20

If the spot rate between the U.S. dollar and the New Zealand dollar is $1 = NZD1.5215, and if the interest rate in the United States is 8 percent and in New Zealand is 4 percent, then what should be the three-month forward exchange rate?

Accepted Answer

A)  $0.6637 
B)  $0.6572 
C)  $0.6825 
D)  $0.6329 
A)  $0.6637 
B)  $0.6572 
C)  $0.6825 
D)  $0.6329

Which of these is a company that operates production and/or sales facilities in multiple countries?

Compute the number of dollars that can be bought with 2 million of foreign currency units: $1 = 15,990 Vietnam dong

An international organization that monitors exchange rates and balance of payments and oversees the global financial system is the ________.

Which of these is defined as a contractual agreement that states the exchange rate to be used at a future exchange date?

Convert the following indirect quote to a dollar direct quote: $1 = 2,150.4 Venezuelan bolivar

Compute the amount of foreign currency that can be purchased for $600,000: 1 Korean won = $0.001045

Compute the number of dollars that can be bought with 5 million of foreign currency units: $1 = 2,150.4 Venezuelan bolivar

Convert each of the following direct quotes to dollar indirect quotes: 1 Korean won = $0.001556 1 Malaysian ringgit = $0.3419 1 Thai baht = $0.03999 $1 equals:

If the spot rate between the U.S. dollar and the Brazilian real is $1 = 2.0895 real and the 3-month forward rate is $1 = 2.1725 real, is the forward real selling at a discount or a premium?

Which of the following is the theory relating the expected adjustment needed in the future spot exchange rate between countries to the inflation rate in each country?

If the current spot rate between the U.S. dollar and the Netherland Antilles guilder was $1 = 1.68 guilder, and if the inflation rate in the United States was 1 percent and in the Netherland Antilles it was 6 percent, then what would be the expected spot rate in one year?

Compute the amount of foreign currency that can be purchased for $200,000: 1 Danish krone = $0.1755

Which of these is an international organization that deals with international trade rules and helps settle disputes between its member governments?

If the spot rate between the U.S. dollar and the Mexican peso is $1 = 2.45 peso and the 3-month forward rate is $1 = 2.05 pesos, is the forward peso selling at a discount or a premium?

All of the following are political risks to the assets and cash flows of multinational corporations EXCEPT:

China's exchange rate is a:

If the spot rate between the U.S. dollar and the Brazilian real is $1 = 2.5698 real and the 3-month forward rate is $1 = 2.9841 real, is the forward real selling at a discount or a premium?

Convert each of the following indirect quotes to dollar direct quotes: $1 = 3.05 Saudi Arabian riyal $1 = 41.45 Philippine peso $1 = 0.52 Latvian lat $1 equals:

Convert the following direct quote to a dollar indirect quote: 1 Danish krone = $0.1755

If the spot rate between the U.S. dollar and the New Zealand dollar is $1 = NZD1.5215, and if the interest rate in the United States is 8 percent and in New Zealand is 4 percent, then what should be the three-month forward exchange rate?

Introduction to Financial Management

Reviewing Financial Statements

Analyzing Financial Statements

Time Value of Money 1: Analyzing Single Cash Flows

Time Value of Money 2: Analyzing Annuity Cash Flows

Understanding Financial Markets and Institutions

Valuing Bonds

Valuing Stocks

Characterizing Risk and Return

Estimating Risk and Return

Calculating the Cost of Capital

Estimating Cash Flows on Capital Budgeting Projects

Weighing Net Present Value and Other Capital Budgeting Criteria

Working Capital Management and Policies

Financial Planning and Forecasting

Assessing Long-Term Debt, Equity, and Capital Structure

Sharing Firm Wealth: Dividends, Share Repurchases, and Other Payouts

Issuing Capital and the Investment Banking Process

Mergers and Acquisitions and Financial Distress

Filters

Exam 19: International Corporate Finance

Which of these is a company that operates production and/or sales facilities in multiple countries?

Compute the number of dollars that can be bought with 2 million of foreign currency units: $1 = 15,990 Vietnam dong

An international organization that monitors exchange rates and balance of payments and oversees the global financial system is the ________.

Which of these is defined as a contractual agreement that states the exchange rate to be used at a future exchange date?

Convert the following indirect quote to a dollar direct quote: $1 = 2,150.4 Venezuelan bolivar

Compute the amount of foreign currency that can be purchased for $600,000: 1 Korean won = $0.001045

Compute the number of dollars that can be bought with 5 million of foreign currency units: $1 = 2,150.4 Venezuelan bolivar

Convert each of the following direct quotes to dollar indirect quotes: 1 Korean won = $0.001556 1 Malaysian ringgit = $0.3419 1 Thai baht = $0.03999 $1 equals:

If the spot rate between the U.S. dollar and the Brazilian real is $1 = 2.0895 real and the 3-month forward rate is $1 = 2.1725 real, is the forward real selling at a discount or a premium?

Which of the following is the theory relating the expected adjustment needed in the future spot exchange rate between countries to the inflation rate in each country?

If the current spot rate between the U.S. dollar and the Netherland Antilles guilder was $1 = 1.68 guilder, and if the inflation rate in the United States was 1 percent and in the Netherland Antilles it was 6 percent, then what would be the expected spot rate in one year?

Compute the amount of foreign currency that can be purchased for $200,000: 1 Danish krone = $0.1755

Which of these is an international organization that deals with international trade rules and helps settle disputes between its member governments?

If the spot rate between the U.S. dollar and the Mexican peso is $1 = 2.45 peso and the 3-month forward rate is $1 = 2.05 pesos, is the forward peso selling at a discount or a premium?

All of the following are political risks to the assets and cash flows of multinational corporations EXCEPT:

China's exchange rate is a:

If the spot rate between the U.S. dollar and the Brazilian real is $1 = 2.5698 real and the 3-month forward rate is $1 = 2.9841 real, is the forward real selling at a discount or a premium?

Convert each of the following indirect quotes to dollar direct quotes: $1 = 3.05 Saudi Arabian riyal $1 = 41.45 Philippine peso $1 = 0.52 Latvian lat $1 equals:

Convert the following direct quote to a dollar indirect quote: 1 Danish krone = $0.1755

If the spot rate between the U.S. dollar and the New Zealand dollar is $1 = NZD1.5215, and if the interest rate in the United States is 8 percent and in New Zealand is 4 percent, then what should be the three-month forward exchange rate?

Introduction to Financial Management

Reviewing Financial Statements

Analyzing Financial Statements

Time Value of Money 1: Analyzing Single Cash Flows

Time Value of Money 2: Analyzing Annuity Cash Flows

Understanding Financial Markets and Institutions

Valuing Bonds

Valuing Stocks

Characterizing Risk and Return

Estimating Risk and Return

Calculating the Cost of Capital

Estimating Cash Flows on Capital Budgeting Projects

Weighing Net Present Value and Other Capital Budgeting Criteria

Working Capital Management and Policies

Financial Planning and Forecasting

Assessing Long-Term Debt, Equity, and Capital Structure

Sharing Firm Wealth: Dividends, Share Repurchases, and Other Payouts

Issuing Capital and the Investment Banking Process

Mergers and Acquisitions and Financial Distress

Filters