Exam 3: International Financial Markets

Assume that the spot rate of the Singapore dollar is $.664. The ADR of a Singapore firm is convertible into 3 shares of stock. The price of an ADR is $20. What is the share price of the firm in Singapore dollars?

International money market transactions normally represent:

At any given point in time, a bank's bid quote will be greater than its ask quote.

Shareholders can have influence on a wider variety of management issues in some countries.

Assume that the bank's bid quote of Mexican peso is $.126 and ask price is $.129. If you have Mexican pesos, what is the amount of pesos that you need to purchase $100,000?

The Basel II accord is focused on eliminating inconsistencies in ____ across countries.

If there is a large supply of savings relative to the demand for short-term funds, the interest rate for that country will be relatively low.

Which of the following is not true regarding electronic communications networks (ECNs)?

A cross exchange rate expresses the amount of one foreign currency per unit of another foreign currency.

When the foreign exchange market opens in the U.S. each morning, the opening exchange rate quotations will be based on the:

When receiving quotations on a currency's exchange rate, the bank's bid quote is the rate at which the bank is willing to sell currency.

Which of the following is not a method that can be used to invest internationally?

The interest rate in developing countries is usually very low.

The degree of financial information that must be provided by public companies is the same among countries.

A futures contract is a contract specifying a standard volume of a particular currency to be exchanged on a specific settlement date.

If a U.S. firm desires to avoid the risk from exchange rate fluctuations, and it will need C$200,000 in 90 days to make payment on imports from Canada, it could:

Which of the following is probably not an example of the use of forward contracts by an MNC?

LIBOR is:

Which of the following is probably not appropriate for an MNC wishing to reduce its exposure to British pound payables?

Institutional investors such as commercial banks, mutual funds, insurance companies, and pension funds from many countries are major participants in the international bond market.