Exam 19: International Corporate Finance

Which of these is defined as the price of one currency in terms of another?

Given these two exchange rates, $1 = 1.43 Australian dollars and $1 = £0.69, compute the cross-rate between the Australian dollar and the pound. State this exchange rate in Australian dollars and in pounds.

Convert the following indirect quote to a dollar direct quote: $1 = 7.2501 South African rand

A large amount of foreign direct investment into a country will most likely result in:

If the current spot rate between the U.S. dollar and the Netherland Antilles guilder was $1 = 1.54 guilder, and if the inflation rate in the United States was 2 percent and in the Netherland Antilles it was 8 percent, then what would be the expected spot rate in one year?

All of the following are examples of factors that affect trading activity between countries EXCEPT:

The concept of interest parity describes:

A financial manager has determined that the appropriate discount rate for a foreign project is 15 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 8 percent and 4 percent, respectively.

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

Which of these is defined as the currency exchange rate between two foreign currencies, each of which is not the currency of the domestic country?

China's exchange rate is a:

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

Assume the spot rate between the U.S. dollar and the Taiwan dollar is $1 = TWD32.456. If the interest rate in the United States is 4 percent and in Taiwan is 3 percent, then what should be the one-month forward exchange rate?

Compute the number of dollars that can be bought with 2 million of foreign currency units: $1 = 48.210 Philippine peso

Given these two exchange rates, $1 = 11.25 Mexican peso and $1 = €0.7521, compute the cross rate between the Mexican peso and the euro. State this exchange rate in pesos and in euros.

A financial manager has determined that the appropriate discount rate for a foreign project is 15 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 5 percent and 7 percent, respectively.