Exam 19: International Business Finance

The 1 year interest rate in the U.S. is 2%. The spot exchange rate for yen is 113.25 to the dollar. The 6 months forward rate is 112.96 to the dollar. These prices indicate that the 6 month risk-free rate in Japan is

To buy one Indian Rupee you would need

Forward contracts benefit only the customer due to a reduction in uncertainty.

An investor purchased 1,000,000 Canadian dollars at an exchange rate of $0.756 U.S. to the Canadian dollar.

What is the difference between and "ask" quote and a "bid" quote?

According to the domestic Fisher effect, if the inflation rate is 5%, and the nominal rate of interest is 7%, the real rate of interest is

The foreign exchange market provides a physical entity that transfers the purchasing power from one currency to another.

The international currency system that presently exists is best described as a ________ rate currency system.

Buying and selling in more than one market to make a riskless profit is called

The number of pounds you can purchase per U.S. dollar is

An investor purchased Canadian dollars at an exchange rate of $0.756 U.S. to the Canadian dollar. The Canadian dollars cost her $1,000,000 (U.S. dollars). How many Canadian dollars did she buy?

The forward price of currencies can be either higher, lower or even the same as the spot price.

In 2016, the U. S. A. comprised approximately ________ of the world's stock market capitalization.

According to the international Fisher effect, if the nominal interest rate in Russia is 9.5% and the inflation rate is 8%, the real rate of interest is approximately

Assume that an importer of wine were to purchase 5,000 cases of premium French Bordeaux for 700,000 euro. Further assume that the quoted exchange rates are as follows: spot rate = .9542 euro to the U.S. dollar; 30-day forward rate = .9502 euro to the U.S. dollar; and 90-day forward rate = .9498 euro to the U.S. dollar. If the actual currency exchange rate at the time payment is due in 90 days is equal to the forward rate of .778 euro to the U.S. dollar, how much would the wine cost the importer in U.S. dollars if payment is made in 90 days? Round to the nearest dollar.

As December 26, 2012, the spot rate for Swiss francs was 1.0917. The 3 month forward rate was 1.0939. Compute the annualized percentage rate premium or discount for Swiss francs.

Assume that your firm must pay 10,000,000 rupees to an Indian firm. How much will you have to pay in U.S. dollars.

What is meant by interest rate parity?

Purchasing price parity is more likely to be the case for common commodities than for personal services.

Transactions carried out in the foreign exchange markets can include direct or indirect exchange rate quotes.