Exam 19: International Corporate Finance

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:

Which of these is an organization of 185 countries that monitors currency exchange,examines financial stability,and watches the global financial system?

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

Exchange Rate Quote Convert the following indirect quote to a dollar direct quote: $1 = 48.210 Philippine peso

Currency Exchange Compute the number of dollars that can be bought with 1 million of foreign currency units: $1 = 3.8249 Saudi Arabian riyal

Exchange Rate Risk A U.S.firm is expecting cash flows of 5 million Mexican pesos and 10 million Indian rupees.The current spot exchange rates are: $1 = 11.255 pesos and $1 = 44.864 rupees.If these cash flows are not received for one year and the expected spot rates at that time will be $1 = 10.080 pesos and $1 = 44.125 rupees,then what is the difference in dollars received that was caused by the delay?

Which of the following is NOT an example of how a company could hedge to reduce currency risk?

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

Compute the number of dollars that can be bought with 2 million of each foreign currency units: • $1 = 19,005 Vietnam dong • $1 = 2,949.6 Venezuelan bolivar • $1 = 7.9523 South African rand

International capital budgeting will require that managers:

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:

What is meant when it is said that the U.S.dollar is strengthening? How would it impact your vacation abroad and foreign visitors to the United States?

The concept of interest parity describes:

Discount Rates 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 rate in the United States and in the foreign country is expected to be 4 percent and 8 percent,respectively.

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?

Currency Exchange Compute the amount of foreign currency that can be purchased for $400,000: 1 Indian rupee = $0.02250

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

If gold is selling in the U.S.for $1,015 per ounce and if 1 peso = $0.35,then gold should sell for _________ in Mexico.

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

Over the past decade,China has acquired hundreds of billions of U.S.dollars due to the trade imbalance between the two countries.The Chinese government has used many of these dollars to purchase Treasury bonds.What would be the effect if China suddenly decided to sell the majority of these Treasury bonds and exchange the dollars for pesos?